The combined net-long in WTI and Brent crude oil slumped by 17% to 389k lots, an eight-month low. This as the economic growth cloud darkened and the risk premium following the Saudi Aramco attack was wiped out. The net-long in WTI plunged by 32%, the most since August 2017, with longs being cut and fresh shorts added.
The overriding focus this week will be the resumption of U.S. - China talks on Thursday, not least after China over the weekend signaled a reluctance to agree to a comprehensive trade deal. While growth and demand worries knocked 5.5% off the price last week, traders may be reluctant to drive the price lower at this stage with geo-politcal risks still elevated.
- Lack of progress of resolving tensions in the Middle East between Saudi Arabia and Iran
- Turkish forces stand ready to invade northern Syria
- Anti-government protests in Iraq, Opec's second largest producer