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Oil prices remain near 2-mth lows as investors bet on weaker prices

Published 2016-07-11, 08:35 p/m
© Reuters. Oil prices remain near 2-mth lows as investors bet on weaker prices
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SINGAPORE, July 12 (Reuters) - Oil prices remained near
two-month lows from the previous trading session on Tuesday as
financial traders lost confidence in a recent price rally,
switching positions in anticipation of lower prices.
International Brent crude oil futures LCOc1 were trading
at $46.13 per barrel at 0027 GMT, down 12 cents from their last
close and near to the $45.90 two-month lows reached the previous
day. U.S. West Texas Intermediate (WTI) crude CLc1 was down 13
cents at $44.63 a barrel.
Analysts said that prices were being pulled down by the
financial players who were switching positions from betting on
price rises, or long positions, to positions that would benefit
from price falls, known as shorts.
Hedge funds and other money managers cut their bullish bets
on crude oil by 22 million barrels over the seven days ending on
July 5.
This means that these financial players have cut their net
long positions in crude futures and options by almost a quarter,
from 633 million barrels to 485 million, over the last four
weeks.
"Oil prices continued their period of weakness as investors
remained concerned that increasing exploration activity in the
U.S. would see U.S. production and inventories remain high.
Signs of an end to several supply disruptions and a stronger
U.S.-dollar also played their part in keeping sentiment
bearish," ANZ bank said on Tuesday.
Physical markets were also weak, with Asian oil refiners
processing less crude as they grapple with margins that plunged
to five-year lows after the region was flooded with supply of
refined products and as slowing economic growth hits demand for
fuels.

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