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Oil Falls as US Production Rises; Declining Exports Point to Continued Builds

WTI futures have fallen roughly 10% since January 25th as US oil production ramps up. Recent reports out of the EIA show production climbing to 10.251 million bpd from 9.919 million bpd. WTI, Brent, and Dubai crude continue their sustained backwardation despite the rise in US production. OPEC’s Monthly Oil Market Report released today acknowledges …

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Crude Oil Makes New Highs as U.S. Inventories Fall for Tenth Straight Week; US Dollar Volatility Skewed Price to the Upside

In a week of political whiplash, the US Dollar stands on uncertain ground as traders grow weary of signals from the White House and Department of the Treasury. The US Dollar has been facing heavy selling pressure in recent weeks as the market rotates into other currencies such as the Euro or British Pound. The …

Crude Oil Makes New Highs as U.S. Inventories Fall for Tenth Straight Week; US Dollar Volatility Skewed Price to the Upside Read More »

Speculators Challenge Historic Long Positioning as Global Inventories Fall

Speculative positioning in NYMEX WTI futures is nearing historic levels as net position for Managed Money contracts climbs to 432,650 and the hedge fund ratio jumps to 15.13. Net positioning is firmly above its high of 405,328 made on 2/21/2017 and the hedge fund ratio is 0.07 away from its high of 15.20 formed on …

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Empirical Models Suggest Higher Prices; Risk Reversal Threat Remains High

Long-term global supply & demand models suggest current oil prices are underperforming historical values. Regression analysis of 6-month average supply-demand differentials versus WTI futures prices since 2005 have oil near $80 per barrel. An intercommodity model regressing oil prices to correlated commodities also suggests higher prices, although to a lesser extent. As of December 31, …

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