Oil prices changed following a steady increase in recent weeks. Shareholders await clues over prospects for a trade agreement between the U.S. and China. Also, it shrugged off concerns over steadily increasing oil supplies.
Brent crude futures fell 5 cents, or 0.1%, at $63.25. The contract increased by 1.3% last week.
West Texas Intermediate crude remained $57.72 a barrel. It did not change from the recent session, which gained 0.8% last week.
Market strategist at AxiTrader said despite the larger-than-expected inventory build. Traders remained focus on U.S.-China trade developments where optimism continues. Also, the market sees a trade agreement between the U.S. and China as more feasible, which is bullish for oil.
The United States and China trade war slowed economic growth across the globe. Also, it prompted analysts to lower forecasts for oil demand, increasing concerns that a supply glut could develop in 2020.
China and U.s had constructive talks on trade in a high-level phone call on Saturday. Contrarily, the media gave few details in a report on Sunday.
A monthly report from the EIA put downward pressure on prices after it estimated that non-OPEC supply growth would increase to 2.3 million BPD. Compared to 1.8 million BPD in 2019, noting production from the U.S., Brazil, Norway, and Guyana.
The Energy Information Administration released data that showed weekly U.S. crude stockpiles rose by 2.2 million barrels. It exceeds the 1.649 million-barrel increase forecast by analysts in a Reuters poll.
Money managers’ WTI net-long position rose 32% to 153,174 futures and options, according to U.S. CFTC data. The more bullish stance was completely due to the short-selling slump, though, as long-only bets dropped 3.3%.
This is a sign that the price rebound may be short-lived since there are still concerns about the global economy.
Hedge-fund managers loosen bets that crude will drop at the fastest pace in 16 months. This is because of the prospects for a trade war deal, and a slowdown in shale drilling helped futures bounced.
Oil short-sellers cut their bearish positions on WTI crude by 41% in the week of Nov. 12. As they come into the market as purchasers to close positions, they are providing oil’s 10% rebound since early October.
TD Securities commodity strategists said they saw a significant amount of short covering last week. It is related to the recent optimism they saw, also a past narrative that the shale patch is unable to sustain its production profile.
While U.S. explorers are still supplying crude at a record clip, drilling dive to the lowest level in more than two years. Also, firms come under rising pressure to cut spending, many destitute for cash, which means a slowdown in production.
WTI concluded the week at $57.72 a barrel, the highest in nearly two months. According to the White House adviser, the trade negotiations were coming to the final stages.
Key progress will be a meeting of OPEC+ next month. If they decided to decrease production further, that should give prices an increase. If not, worries about a world afloat with oil possibly will resurface.
Andy Hall, a legendary oil trader, joined the EIA in predicting demand that would probably be a plateau in about a decade. The EIA reported the current growth rate of 1 million barrels a day would hold for the next five years. For now, the world seems to need more oil.
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