Oil traders focus on deteriorating economic outlook rather than OPEC: Kemp

LONDON (Reuters) by John Kemp – The weakening outlook for oil consumption coupled with rising output from U.S. shale and softer than expected U.S. sanctions on Iran have convinced most traders the market is moving into a period of oversupply. In the run up to last week’s OPEC meeting in Vienna, hedge fund managers had little confidence in the organization’s ability to cut production by enough to avoid an oversupplied market next year. Fund managers sold another 32 million barrels of Brent futures and options in the week to Dec. 4, bringing total sales over the last 10 weeks to a record 360 million barrels. Funds now hold just over two long positions for every short one, down from a ratio of more than 19:1 at the end of September, and the least-bullish position for 17 months. Bearish short positions have risen to 117 million barrels, up from just 27 million at the end of September, and the largest number since June 2017. Pessimism about the outlook for crude prices was reflected by a similar collapse in sentiment towards middle distillates such as gasoil (tmsnrt.rs/2PtIemz). Fund managers sold another 20 million barrels of European gasoil, bringing total sales in the… continue reading

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