Latest Market Commentary
June 26, 2017
The Baker Hughes rig count report on Friday had rigs looking for crude oil up 11 to a total of 758 rigs, this was the 23rd week in a row that rigs have increased. Last year at this time there were only 330 rigs looking for crude oil.
Baker Hughes reported that Canada added 7 more rigs to bring the total up to 98 rigs. Last year at this time there were only 36 rigs online.
The market has tried to rally the last few days but just has not been able to muster any follow through buying. The bias remains very bearish and that is getting some traction in reports and commentaries that could lead to a bounce. The funds have reduced their long positions substantially and that is getting attention in reports this morning saying that the funds have lost faith in OPEC’s ability to rebalance supplies. The CFTC reported that WTI crude oil net long positons fell by 10,761 contract to 134,742 contracts. Long positions dropped by 5.7% to 301,476, the lowest level in almost eight months, while short positons increased by 34% to 166,734, the most since August.
The storm last week in the gulf has caused some disruptions and could lead to some draw in the inventory report. It will be interesting to see what the nest couple weeks of inventory reports produce. If the market can see draws it might allow the market to see a bounce higher.