Brent edges up to
$56.54 amid buying interest from speculative financial investors, but
gains are capped by
the prospect of faster growth in US oil production
London — Oil prices rose on Monday
as investors showed record confidence in prices rising further, although gains were capped by the prospect of faster growth in US oil production.
Brent crude oil rose 55c to $56.54 a barrel by 10.53am GMT, while US West Texas Intermediate (WTI) added 39c to $54.38.
Money managers raised their bullish US crude futures and options positions in the week to February 21 to the highest on record, the US Commodity Futures Trading Commission (CFTC) said on Friday.
"Oil prices are being supported by the ongoing buying interest shown by speculative financial investors, who for the first time expanded their net long positions in WTI to more than 400,000 contracts," Commerzbank analyst Carsten Fritsch said in a note.
Speculators also raised their bets on a rally in Brent crude futures to a record high in the week to February 14, with fresh data expected to be released later on Monday.
"With speculators increasing their bullish bets on US crude to an all-time high, the risk of disappointment and subsequent downward spiral in prices has never been greater," oil brokerage PVM’s Stephen Brennock said.
Among the risks is the level of compliance to the deal between oil cartel Opec and other producers to bring down oil output by about 1.8-million barrels a day.
Opec’s record compliance with the deal has surprised the market, and the biggest laggards, the United Arab Emirates (UAE) and Iraq, have pledged to catch up with their targets.
The International Energy Agency put Opec’s average compliance at a record 90% in January. Based on a Reuters average of production surveys, compliance stands at 88%. A Reuters survey of Opec production later this week will show compliance for February.
Looming over the success of the deal is the reaction of US shale producers to rising prices and their ability to increase output.
US drillers added five oil rigs in the week to February 24 to 602, the most since October 2015, energy services firm Baker Hughes said on Friday.
Over the past two weeks the US implied shale oil rig count went up by 15.
"This is marginally higher than our projected seven rigs per week for first half 2017," wrote Nordic bank SEB chief commodities analyst Bjarne Schieldrop.
The bank has adjusted its dynamic price forecast for 2019 marginally lower from $68.30 a barrel to $67.90.
Reuters
as investors showed record confidence in prices rising further, although gains were capped by the prospect of faster growth in US oil production.
Brent crude oil rose 55c to $56.54 a barrel by 10.53am GMT, while US West Texas Intermediate (WTI) added 39c to $54.38.
Money managers raised their bullish US crude futures and options positions in the week to February 21 to the highest on record, the US Commodity Futures Trading Commission (CFTC) said on Friday.
"Oil prices are being supported by the ongoing buying interest shown by speculative financial investors, who for the first time expanded their net long positions in WTI to more than 400,000 contracts," Commerzbank analyst Carsten Fritsch said in a note.
Speculators also raised their bets on a rally in Brent crude futures to a record high in the week to February 14, with fresh data expected to be released later on Monday.
"With speculators increasing their bullish bets on US crude to an all-time high, the risk of disappointment and subsequent downward spiral in prices has never been greater," oil brokerage PVM’s Stephen Brennock said.
Among the risks is the level of compliance to the deal between oil cartel Opec and other producers to bring down oil output by about 1.8-million barrels a day.
Opec’s record compliance with the deal has surprised the market, and the biggest laggards, the United Arab Emirates (UAE) and Iraq, have pledged to catch up with their targets.
The International Energy Agency put Opec’s average compliance at a record 90% in January. Based on a Reuters average of production surveys, compliance stands at 88%. A Reuters survey of Opec production later this week will show compliance for February.
Looming over the success of the deal is the reaction of US shale producers to rising prices and their ability to increase output.
US drillers added five oil rigs in the week to February 24 to 602, the most since October 2015, energy services firm Baker Hughes said on Friday.
Over the past two weeks the US implied shale oil rig count went up by 15.
"This is marginally higher than our projected seven rigs per week for first half 2017," wrote Nordic bank SEB chief commodities analyst Bjarne Schieldrop.
The bank has adjusted its dynamic price forecast for 2019 marginally lower from $68.30 a barrel to $67.90.
Reuters
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