{"id":7218,"date":"2016-11-21T23:01:56","date_gmt":"2016-11-22T05:01:56","guid":{"rendered":"http:\/\/nrgibroker.com\/?p=7218"},"modified":"2016-12-12T12:22:12","modified_gmt":"2016-12-12T18:22:12","slug":"oil-bets-are-biggest-in-9-years-amid-opec-trump-volatility","status":"publish","type":"post","link":"https:\/\/nrgibroker.com\/en\/oil-bets-are-biggest-in-9-years-amid-opec-trump-volatility\/","title":{"rendered":"Oil Bets Are Biggest in 9 Years Amid OPEC, Trump Volatility"},"content":{"rendered":"

Money managers, producers and consumers made the biggest bets on West Texas Intermediate crude prices in nine years, amid signals more volatility is coming.<\/span><\/h4>\n

Global markets were roiled after Donald Trump\u2019s election as U.S. president and as OPEC continued negotiations on a deal to cap output. The U.S. dollar climbed to the highest since January. A measure of oil volatility surged last week to a seven-month high, a sign that traders were anticipating bigger price swings.<\/span><\/h4>\n

Wagers on higher and lower prices held by speculators and hedgers reached 1.47 million contracts in the week ended Nov. 15, the most since 2007, U.S. Commodity Futures Trading Commission data show. Trading volume of calls giving investors the right to purchase WTI futures rose to a record that day. The CBOE Crude Oil Volatility Index reached the highest since April. Brent oil shorts, bets that prices will fall, rose to the highest in more than two years.<\/span><\/h4>\n

\u201cThere\u2019s tension in the market, with both producers and consumers worried about what OPEC does or won\u2019t do on Nov. 30,\u201d said Tim Evans, an energy analyst at Citi Futures Perspective in New York. \u201cThey want to be protected from surprising price moves.\u201d\u00a0<\/span><\/h4>\n

OPEC Meeting<\/span><\/h4>\n

Investors are weighing the chances that the Organization of Petroleum Exporting Countries will complete a deal to cap output at its Nov. 30 meeting in Vienna. While Saudi Arabian Energy Minister Khalid Al-Falih told Al Arabiya television he\u2019s optimistic a deal will be reached, only seven of 20 analysts surveyed by Bloomberg last week expect the group to set output targets for its members.<\/span><\/h4>\n

OPEC agreed in September to cut their collective output to 32.5 million to 33 million barrels a day and has been trying to persuade other suppliers, notably Russia, to join the cuts. OPEC Secretary General Mohammed Barkindo said he\u2019s confident the group can reduce record oil inventories and bring forward the rebalancing of the market.<\/span><\/h4>\n

\u201cThe Saudis are working hard to reach a deal,\u201d said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy. \u201cYou don\u2019t fight the Fed in the bond market and when it comes to oil you don\u2019t fight the Saudis.\u201d<\/span><\/h4>\n

The September agreement marked the end of OPEC\u2019s two-year long experiment with pumping at will. Saudi Arabia led the group in the effort to grab market share and curb the development of more expensive reserves such as U.S. shale.<\/span><\/h4>\n

U.S. Production<\/span><\/h4>\n

While U.S. production has dropped from last year\u2019s 44-year high, the decline is slowing. The Energy Information Administration this month raised its output forecast for 2017. Rigs targeting oil in the U.S. rose the most in 16 months last week, according to Baker Hughes Inc.<\/span><\/h4>\n

Producers and merchants increased short positions, or protection against lower WTI prices, to the highest level since March 2011. They added 66,613 bearish contracts over the past two weeks as prices retreated from last month\u2019s peak at above $50 a barrel.<\/span><\/h4>\n

\u201cThe Saudis want higher prices but won\u2019t sacrifice just to see a major competitor, U.S. shale, benefit,\u201d said Sarah Emerson, managing director of ESAI Energy Inc., a consulting company in Wakefield, Massachusetts. \u201cThe Trump election changes things. In one day the U.S. shale business got better. The government will be more responsive to the industry.\u201d<\/span><\/h4>\n

Money managers\u2019 net-long position in WTI advanced for the first time since mid-October, climbing by 3,906 futures and options to 163,321. Shorts climbed 14 percent while longs rose 8.1 percent. WTI gained 1.8 percent to $45.81 a barrel in the report week. It rose 2.7 percent to $46.93 as of 8:48 a.m. on Monday.<\/span><\/h4>\n

Brent Bets<\/span><\/h4>\n

In the Brent market, money managers increased short positions by 11 percent to 157,016 during the week, the highest level since September 2014, according to data from ICE Futures Europe. The net-long position in the global benchmark slipped by 4.6 percent during the week to the lowest since January.<\/span><\/h4>\n

In fuel markets, net-bullish bets on gasoline decreased 35 percent to 25,796 contracts, as futures slipped 2.5 percent in the report week. Money managers were net-short 393 contracts of ultra low sulfur diesel, from net-long 7,791 the previous week. Futures advanced 0.2 percent.<\/span><\/h4>\n

\u201cI suspect that when the OPEC meeting is over there will have been a lot more smoke than fire,\u201d said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. \u201cIf they don\u2019t come up with a convincing agreement, they\u2019ll be forced to revisit the issue before long.\u201d<\/span><\/h4>\n

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

 <\/p>\n

Copyright: Bloomberg<\/a><\/span><\/h4>\n","protected":false},"excerpt":{"rendered":"

Money managers, producers and consumers made the biggest bets on West Texas Intermediate crude prices in nine years, amid signals more volatility is coming. Global markets were roiled after Donald Trump\u2019s election as U.S. president and as OPEC continued negotiations on a deal to cap output. The U.S. dollar climbed to the highest since January. […]<\/p>\n","protected":false},"author":1,"featured_media":6992,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1017],"tags":[1182,587,208,1181,300,455,1171],"class_list":["post-7218","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-bloomberg","tag-commodities","tag-oil","tag-oil-bets","tag-opec","tag-petroleum","tag-trump"],"_links":{"self":[{"href":"https:\/\/nrgibroker.com\/en\/wp-json\/wp\/v2\/posts\/7218","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=7218"}],"version-history":[{"count":0,"href":"https:\/\/nrgibroker.com\/en\/wp-json\/wp\/v2\/posts\/7218\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/nrgibroker.com\/en\/wp-json\/wp\/v2\/media\/6992"}],"wp:attachment":[{"href":"https:\/\/nrgibroker.com\/en\/wp-json\/wp\/v2\/media?parent=7218"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/nrgibroker.com\/en\/wp-json\/wp\/v2\/categories?post=7218"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/nrgibroker.com\/en\/wp-json\/wp\/v2\/tags?post=7218"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}