{"id":6959,"date":"2016-09-12T19:54:00","date_gmt":"2016-09-13T00:54:00","guid":{"rendered":"http:\/\/nrgibroker.com\/?p=6959"},"modified":"2016-09-12T19:54:00","modified_gmt":"2016-09-13T00:54:00","slug":"oil-bears-dominate-market-as-doubt-grows-over-output-limits","status":"publish","type":"post","link":"https:\/\/nrgibroker.com\/en\/oil-bears-dominate-market-as-doubt-grows-over-output-limits\/","title":{"rendered":"Oil Bears Dominate Market as Doubt Grows Over Output Limits"},"content":{"rendered":"

The longer OPEC and other producers talk about a ceiling on crude output, the more doubts grow in the market. \u00a0<\/span><\/h2>\n

Money managers increased wagers on falling prices by the most in three months as a meeting between Russia and Saudi Arabia ended without specific measures to support prices. Producers have pledged to discuss action in Algiers later this month.<\/span><\/h2>\n

\u201cThe more they talk, the less people listen,\u201d said Michael D. Cohen, an analyst at Barclays Plc in New York. \u201cIf you look at the actual statements from the Saudis, there\u2019s not a lot of enthusiasm. They\u2019re saying that either they don\u2019t believe a substantial intervention is needed right now or that if other producers want a freeze, they\u2019ll go along.\u201d<\/span><\/h2>\n

Saudi Arabia\u2019s Energy Minister Khalid Al-Falih said on Sept. 5 that he\u2019s optimistic producers will agree to cooperate in Algiers. He spoke after meeting with his Russian counterpart, Alexander Novak,\u00a0at the G-20 summit in China. Novak said that a freeze in production by OPEC and Russia would be the most effective way of stabilizing the market.<\/span><\/h2>\n

The International Energy Forum, including 73 countries that account for about 90 percent of the global supply and demand for oil and natural gas, will meet in the Algerian capital Sept. 26-28. The Organization of Petroleum Exporting Countries will hold informal talks on the sidelines of the gathering.<\/span><\/h2>\n

Parsing Words<\/span><\/h2>\n

\u201cEveryone is sifting for clues on whether OPEC will reach an agreement to limit production or leave it uncapped with the potential for higher output,\u201d said Tim Evans, an energy analyst at Citi Futures Perspective in New York. \u201cAt this point we\u2019re waiting for the outcome of the talks. A lot of people are standing to the side while others are building positions with a specific view in mind.\u201d<\/span><\/h2>\n

A freeze deal between OPEC members and other producers was proposed in February. A meeting in April ended with no accord because Iran refused to join, while Saudi Arabia insisted that its rival take part. Iran has said it\u2019s too soon to cap output as it\u2019s still restoring production curbed by sanctions.<\/span><\/h2>\n

Speculators bolstered their short position in West Texas Intermediate crude by 34,954 futures and options\u00a0during the week ended Sept. 6, according to the Commodity Futures Trading Commission.\u00a0Bets on rising prices declined.<\/span><\/h2>\n

Prices Drop<\/span><\/h2>\n

WTI futures dropped 3.3 percent to $44.83 a barrel in the report week and prices lost 1.6 percent to $45.15 at 9:18 a.m. New York time.<\/span><\/h2>\n

Futures surged Sept. 8 after the Energy Information Administration reported U.S. crude inventories fell 14.5 million barrels in the week ended Sept. 2, the biggest drop since January 1999. Prices retreated the next day as speculation grew the supply drop was a one-off caused by a tropical storm that disrupted imports and offshore production.<\/span><\/h2>\n

Money managers\u2019 short position in WTI climbed to 130,274 futures and options. Longs fell 1.9 percent. The resulting net-long position dropped 19 percent. Net-long positions in Brent crude decreased by 37,226 contracts, according to ICE Futures Europe.<\/span><\/h2>\n

In other markets,\u00a0net-bullish bets on gasoline declined 32 percent to 11,148 contracts. Gasoline futures dropped 9.1 percent in the report week. Net-long wagers on U.S. ultra low sulfur diesel tumbled 56 percent to 9,840 contracts. Futures declined 4.3 percent.\u00a0<\/span><\/h2>\n

Gambling Momentum<\/span><\/h2>\n

\u201cThere\u2019s a lot of gambling taking place,\u201d said Stephen Schork, president of the Schork Group Inc., a consulting company in Villanova, Pennsylvania. \u201cA lot of money managers are betting that a bottom has been put in but I\u2019m skeptical.\u201d\u00a0<\/span><\/h2>\n

U.S. crude stockpiles remain at their highest seasonal level in more than 20 years. Refineries plan maintenance programs for September and October when fuel demand is lower. Over the past five years, refiners\u2019 thirst for oil has dropped an average of 1.2 million barrels a day from July to October.<\/span><\/h2>\n

\u201cThe market will probably yo-yo in a range through the maintenance season but there\u2019s downside risk,\u201d Schork said. \u201cIf demand isn\u2019t a strong as hoped and crude inventories rise, the market could take another leg lower.\u201d<\/span><\/h2>\n

\"shutterstock_352973621\"<\/a><\/p>\n

<\/h2>\n

Copyright: Bloomberg<\/a><\/span><\/h2>\n","protected":false},"excerpt":{"rendered":"

The longer OPEC and other producers talk about a ceiling on crude output, the more doubts grow in the market. \u00a0 Money managers increased wagers on falling prices by the most in three months as a meeting between Russia and Saudi Arabia ended without specific measures to support prices. Producers have pledged to discuss action […]<\/p>\n","protected":false},"author":1,"featured_media":6967,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1017],"tags":[525,854,208,300,455,852],"class_list":["post-6959","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-brent","tag-crude","tag-oil","tag-opec","tag-petroleum","tag-west-texas"],"_links":{"self":[{"href":"https:\/\/nrgibroker.com\/en\/wp-json\/wp\/v2\/posts\/6959","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/nrgibroker.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/nrgibroker.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/nrgibroker.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/nrgibroker.com\/en\/wp-json\/wp\/v2\/comments?post=6959"}],"version-history":[{"count":0,"href":"https:\/\/nrgibroker.com\/en\/wp-json\/wp\/v2\/posts\/6959\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/nrgibroker.com\/en\/wp-json\/wp\/v2\/media\/6967"}],"wp:attachment":[{"href":"https:\/\/nrgibroker.com\/en\/wp-json\/wp\/v2\/media?parent=6959"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/nrgibroker.com\/en\/wp-json\/wp\/v2\/categories?post=6959"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/nrgibroker.com\/en\/wp-json\/wp\/v2\/tags?post=6959"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}