Oil prices are getting off to a positive start to the new week of trading and are thus building on the gains they achieved last week. Brent is trading at a good $59 per barrel, WTI at $53 per barrel. Very high investor interest is currently favoring oil prices: speculative net long positions in WTI climbed by 41,000 to 216,400 contracts in the week to 7 April – this is the steepest weekly rise in four years. At the same time, it more than reversed the position cut in March. Net long positions currently find themselves at their highest level since August 2014. The decline in US oil production announced in that reporting week evidently prompted many investors to close their short positions, for three-quarters of the increase in net long positions can be attributed to short covering. All the same, the growing optimism among investors is remarkable given that the same reporting week saw agreement reached in the nuclear negotiations with Iran, which could ultimately lead to oil sanctions being lifted and Iranian oil thus returning to the already oversupplied market. Speculative net long positions in Brent are also at their highest level since the summer of 2014. “We believe the optimism among investors vis-à-vis oil is exaggerated. This has given rise to considerable correction potential which could lead at any time to a sharp fall in prices”, says Commerzbank. China imported 6.3 million barrels of oil per day in March – although this was 14% more than last year’s weak March figure, it was approx. 5% below the level of the two previous months.
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