Crude had
rallied (+44%) from its thirteen year low on a proposal by the Saudi’s, Russia,
Venezuela and Qatar to cap oil output and reduce a global surplus.
The
investors again are losing faith in crudes recent rally. Global fundamentals
just do not support oil prices. Perhaps more importantly, doubts are growing
over whether the major producers will be able to agree on an output freeze in
Doha on April 17.
Both WTI and
Brent retreated last week (-4%) for the first time since mid-February and
remain on the back foot starting this week.
Iran wants
to continue to produce until they can restore pre-sanction levels. While
the Saudi’s Crown Prince Mohammed bin Salman said that his country would freeze
their output only if “Iran and other major producers do as well.”
It seems
that if an agreement could be reached to freeze output without Iran in Doha, it
would not amount to anything.
Futures
positions indicate that traders are
again adding to their ‘short’ positions and this after the liquidation of
record ‘shorts’ position that were squeezed in the +44% rally over the past
two-months.
Very useful information! Thanks.
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ReplyDelete