A negative demand outlook and US President Donald Trump’s Twitter critique of the world’s biggest crude exporter, deepened oil’s decline as investors fled a market by excess supplies. On Tuesday, Futures plunged 6 percent in both London and New York. At a time of steadily rising American production and stockpiles, OPEC’s dire forecast for 2019 demand came.
President Trump cautioned Saudi Arabia to mourn prices that dipped below $US57 a barrel for the first time since December and curb output in a matter of weeks. A senior commodities strategist at ING Bank ‘prices were not helped by this tweet’.
OPEC will likely try to ignore President Trump’s call as much as possible, given the growing global surplus over the first half of 2019. For a record 12 sessions on fears of a supply surplus, West Texas Intermediate futures have fallen.
To the lowest in 14 months as of November 6, money managers combined bullish positions in WTI and Brent sank, as long positions shrank and shorts increased commodity Futures Trading commission data show.
Adding to the shorts are the trend following guys and liquidating longs are global macro guys, getting a combination of the systematic CTAs. At 12.48pm WTI for December delivery dropped on the New York Mercantile Exchange to $US57.24 a barrel i.e. by $US2.69. While above the 100-day average, the Total volume traded Tuesday was almost 60 percent.
On the London-based ICE Futures Europe exchange, Brent futures for January settlement fell $US3.06 to $US67.06. The global benchmark crude for the same month traded at a $US9.73 premium to WTI.
John Kilduff, partner at Again Capital, sent a negative signal to the market in coming together to cut 1 million barrels, that unwillingness yesterday and over the weekend by Russia to participate. Since May 2017 early on Tuesday, the Bloomberg dollar spot Index touched the highest, before slipping back.
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