At the beginning of the week, Brent crude was trading just slightly above the 2.5-month low of $ 45 per barrel, reached on Friday. Brent finished the week lower by 4%. Among the participants of the market pessimism reigned. Financial investors continue to exit from the market, thereby putting increased pressure on the oil quotations. According to the CFTC, in the week to July 19 the number of net long speculative positions on WTI fell by 18 400 to 136 100 contracts. This is the third reduction in the past four weeks, bringing the number of net long positions to their lowest level since the beginning of March this year. Meanwhile, the index is now likely to continue to fall. Most likely, the number of net long speculative positions on the brand also will be reduced.
It should be noted that the positions on the long Brent were much larger than WTI. Most of these positions were open at $ 45 at least, so that if the quotes fall below this level, we can see a new wave of speculative sales, which will strengthen the tendency to decrease. The trigger for the decline may make current data on drilling activity in the US, made public by oilfield services company Baker Hughes on Friday. According to the report the number of active oil drilling in the country last week rose for the fourth consecutive time. However, it would be premature to assume that this will lead to an increase in US oil production. Although drilling activity is currently at its highest level since the end of March this year, it is still 30% below the begining of the year.
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