We continue to look for another leg down and undercutting the prior lows.
$51.84 down $2.14 last.
From Hellenic Shipping News:
News that world powers were closing in on a nuclear deal with Iran sent oil prices down last week. The deal has traders worried that the global oil glut could increase once the shackles are removed from the country’s petroleum exports.
However, even as some traders fret over Iran, others are betting big that oil prices are poised to bounce. Speculators boosted their net-long position on U.S. oil benchmark West Texas Intermediate by 21% over the last week of March, according to new data from the U.S. Commodity Futures Trading Commission. That was the biggest bullish move on the oil market in four years as traders bet big that prices are about to rally.
Lots of noise
There has been a fierce tug-of-war in the market since the start of the year as oil traders look for a sign that oil prices have bottomed. Bulls argue that the rapid decline in the U.S. rig count will keep a lid on supplies and could lead to declining oil production by the end of this year. They also point out that demand for gasoline is rising — up 2% from this time last year — while gasoline inventories unexpectedly drew down last week.
On the other side of the debate, bearish traders think oil prices are due for another leg down. These traders fret about the Iranian nuclear deal adding to supply. They’re also quick to point out that the world is running out of places to put its overabundance of supply as oil storage facilities quickly fill to the brim.
This debate has sent oil prices on a wild ride in recent weeks. That ride could continue until there is a stronger consensus that the glut of oil is being worked off.
Not buying the bearish worries
A growing number of oil traders, however, simply don’t buy the bearish argument. That’s abundantly clear from the massive increase in net-long bets in WTI during the last week in March. Not only did traders increase their bullish bets to the greatest degree since March 2011, but short positions by bearish traders also dropped the most in three months. Clearly, oil traders see much more upside than downside....MORE
