WTI is consolidating in Asia around the $33 handle, bears lurking
- Oversupply concerns are here to stay for the time being in the price war.
- Do not expect any material moves as funds were already positioned extremely short in the complex - TDS
The price of a barrel of oil has stabilised on Thursday but bears are lurking. At the time of writing, WTI is trading at $33.22 having travelled between a range of $32.81 and $33.60bbls.
Crude oil prices are ranging around the $30/bbl range, with the forever changing risk tone pulling and pushing on prices since the almighty drop at the start of the week following the news of a price war between Russia and the Saudis. The oversupply concerns are here to stay for the time being while the Saudis, Russians, and UAE scramble to win market share.
"The price war is taking the next step with Saudi Arabia announcing a some 2.6m bpd increase in production for April, to 12.3m bpd, while Russian Energy Minister Novak is set to meet with oil bosses to discuss next steps, where he notes they have the capacity to increase production by up to 500k bpd in fairly short order," analysts at TD Securities explained, adding:
"One glimmer of hope were the comments that Russia is not closing the door on future cooperation with OPEC, meanwhile President Trump calling the Saudi Prince in relation to the price war has increased speculation that the President could use his political influence in Saudi Arabia to support the market should the US industry feel major pain. In terms of CTAs, we do not expect any material moves as funds were already positioned extremely short in the complex, and elevated volatility will keep excess positioning in check for now."