• 4 minutes Trump will meet with executives in the energy industry to discuss the impact of COVID-19
  • 8 minutes Charts of COVID-19 Fatality Rate by Age and Sex
  • 11 minutes Why Trump Is Right to Re-Open the Economy
  • 13 minutes Its going to be an oil bloodbath
  • 2 hours While China was covering up Covid-19 it went on an international buying spree for ventilators and masks. From Jan 7th until the end of February China bought 2.2 Billion masks !
  • 1 hour US Shale Resilience: Oil Industry Experts Say Shale Will Rise Again
  • 1 min Ten days ago Trump sent New York Hydroxychloroquine. Being administered to infected. Covid deaths dropped last few days. Fewer on ventilators. Hydroxychloroquine "Cause and Effect" ?
  • 6 hours Marine based energy generation
  • 2 hours China Takes Axe To Alternative Energy Funding, Slashing Subsidies For Solar And Wind
  • 4 hours Today 127 new cases in US, 99 in China, 778 in Italy
  • 10 hours Real Death Toll In CCP Virus May Be 12X Official Toll
  • 1 min What If ‘We’d Adopted A More Conventional Response To This Epidemic?’
  • 50 mins Apple to Bypass Internet and Beam Directly to Phones
  • 7 hours Which producers will shut in first?
  • 1 min How to Create a Pandemic
  • 16 hours TRUMP pushing Hydroxychloroquine + Zpak therapy forward despite FDA conservative approach. As he reasons, "What have we got to lose ?"
Alt Text

Big Oil Raises Debt To Ride Out Price Crash

As prices crashed, the supermajors…

Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

More Info

Premium Content

Investors Back Brent To Break $80

For more than a week, Brent Crude prices have been flirting with the $80 threshold as market participants have focused on the shrinking oil supply from Iran and continuous drop in Venezuela’s production.

For a couple of weeks now, investors, traders, and money managers have been increasingly bullish on Brent Crude, while Permian constraints have made them trim bets that WTI Crude prices would rise.

The bullish sentiment in Brent was further stoked this week by reports that OPEC’s largest producer and leader Saudi Arabia may now be comfortable letting oil prices rise above $80 a barrel—a possible sign that the Saudis may not be rushing to balance supply if more Iranian oil comes off the market this month and next.

The reported Saudi comfort with an $80-plus Brent price has spread to oil investors and traders. In just two days, September 17 and 18, open interest in call options—options to buy—Brent at $80 and $85 a barrel expiring next week surged by almost 45 percent, according to data by the Intercontinental Exchange compiled by Reuters.

The open interest in Brent options at $80 and $85 is now nearly half of all November call and put options at prices between $60 and $100, suggesting that investors are betting that Brent prices will cross the $80 mark very soon.

Hedge funds and other money managers raised their bullish bets on Brent in three consecutive weeks, extending their net long position in Brent by 23 million barrels to 440 million barrels in the week to September 11, exchange data compiled by Reuters market analyst John Kemp shows.

The net long position—the difference between bets that prices will rise and bets on a drop—has increased by a total of 116 million barrels over the past three weeks. Related: Ex GM Boss: Tesla ‘Headed For The Graveyard’

Money managers’ sentiment toward WTI, however, is not so bullish. Bets that WTI would rise dropped in eight of the past ten weeks, according to data from the U.S. Commodity Futures Trading Commission compiled by Bloomberg. Hedge funds cut their net long position in WTI by 5.1 percent to 346,327 futures and options for the week to September 11.

While WTI Crude prices are much more influenced by U.S. inventory reports and current concerns that pipeline bottlenecks will stifle the flow of Permian oil to the U.S. Gulf Coast for exports, Brent crude prices are moved by the global supply and demand picture and short-term expectations of the (in)balance of this equation. The exception to this rule is when Saudi Arabia, OPEC, or Russia decide to drop some hints, comments, or reports, or when U.S. President Donald Trump takes to Twitter to complain of the high oil prices and demand that the cartel reduce pricing—like he did again today.

This week, it was Saudi Arabia that was reportedly okay with allowing Brent prices to rise above $80 amid signs that Iranian oil exports are already noticeably dropping and expected to further decline as the starting date for U.S. sanctions approaches. Related: Mexico Aims To Become The Energy Hub Of Latin America

Next week, it will be the statements and reports after this coming weekend’s meeting of OPEC and non-OPEC representatives to review the state of the oil market. The cartel and its allies are expected to discuss how to distribute among themselves the production boost they agreed on in June, with Iran vehemently opposing the idea of any pact participant making up for shortfalls elsewhere.

While OPEC and friends discuss supply, they will also be closely looking at demand forecasts for the fourth quarter and early next year. OPEC Secretary General Mohammad Barkindo has recently said that global oil demand had started to face some headwinds.

The escalating U.S.-China trade war, the emerging markets crises from Turkey to Argentina, and weakening currencies in major Asian oil importers like India, are all expected to cap rising oil prices as global economic and oil demand growth could suffer if Brent crude breaks above the $70-$80 band.

But so far this week, the oil market has been paying more attention to tightening supply than concerns about demand.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage






Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News