On the ICE Futures exchange, the October contract for global benchmark Brent was down 1.71% at $50.02 a barrel while USA counterpart West Texas Intermediate fell 1.67% to $47.71 for September deliveries.
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He argues that these numbers, which compare long positions – held by those expecting prices to rise – with short positions held by those expecting them to fall “underlined that the rally has been a function of a colossal short squeeze, with very few fresh longs added, as the talk of a potential production agreement upended the seasonally typical accumulation of shorts, as the end of the U.S. driving season sees demand dip, while output continues to rise”.
U.S. West Texas Intermediate (WTI) crude futures were down 29 cents, or 0.6 percent, at $48.23 a barrel. “They’ve been successful over the past year in jawboning the market, and this is the latest example”.
Talks to implement a production cap collapsed in April when Saudi Arabia said it wouldn’t take part without Iranian participation. Brent fell 98 cents, or 1.93 per cent, to $49.90.
The market started to recover a little over two weeks ago, when Saudi Arabia’s energy minister said the country would work with other oil producers to stabilize prices at an informal OPEC meeting in Algeria next month.
Khobar-For long years, Saudi Arabia has been pioneering the crude oil market, given that it has been the biggest source of crude oil and biggest producer regarding quantity.
That run-up followed a collapse in prices from June peaks above $50 to a brief dip back below $40 for USA crude. From that nadir, the price doubled over the next five months before tumbling yet again, sliding 22% to the most recent low of $41.51 a barrel struck on August 2.
Saudi Arabia told OPEC that its production rose to an all-time high of 10.67 million barrels a day in July, according to a report from the group.
Also adding extra impetus to the downside rally was the reality that OPEC and major oil producers are unlikely to come to an agreement to steady oil output and stabilize oil prices during their impromptu meeting at the end of September. Stockpiles of both crude and gasoline remain at the highest seasonal levels in decades even after the declines.
NEW YORK-Oil prices slipped Monday on a stronger dollar and expectations of increased production.
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Meanwhile in the US, the oil-field services company Baker Hughes announced Friday that the oil rig count rose by 10 to 406 for the week ending August 19 with implied shale rigs rising by 7, primarily in Texas. USA oil output has fallen for more than a year after companies sharply cut spending on new drilling, but higher oil prices in recent months have prompted some companies to put new rigs to work.
