Oil trimmed its biggest monthly decline in almost a year while hedge funds tempered their outlook for prices.
Though oil rose as much as 1.4 percent in New York Monday, it’s heading for the biggest monthly drop since July as global supply swells. Commodity Futures Trading Commission data on Friday showed money managers cut their net-bullish positions on West Texas Intermediate to the lowest in 10 months during the week ended June 20 and boosted wagers on falling prices.
Oil in New York and London tumbled into a bear market last week on concerns that expanding global supply will counter the impact of output cuts from the Organization of Petroleum Exporting Countries and its partners including Russia. U.S. crude drillers added rigs for a 23rd straight week, the longest stretch in three decades, according to data Friday from Baker Hughes Inc.
“There is scope for oil markets to tighten over the rest of the year,” Kerry Craig, global markets strategist for JPMorgan Asset Management, said in a Bloomberg television interview. “As those prices stay weak, certainly some of those companies start adjusting their outlook for capex and investment and that slowly actually does start to bring rebalance into the market.”
WTI for August delivery climbed as much as 59 cents to $43.60 a barrel on the New York Mercantile Exchange, and was at $43.47 at 1:58 p.m. in Hong Kong. Total volume traded was about 56 percent above the 100-day average. The contract is up a third session after the 14-day relative strength index signaled it may be oversold. Prices are down about 10 percent this month.
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Brent for August settlement gained as much as 62 cents, or 1.4 percent, to $46.16 a barrel on the London-based ICE Futures Europe exchange. Front-month prices lost 3.9 percent last week. The global benchmark crude traded at a premium of $2.56 to WTI.
Money managers’ WTI net long positions, the difference between wagers on a price increase and bets on a decline, fell by 60,556 to 134,742 contracts, CFTC data showed. Short positions expanded by 34 percent to 166,734, the most since August, and longs slid to the lowest in almost eight months.
Oil-market news:
Enterprise Products Partners LP resumed service on its Seaway Legacy crude pipeline Sunday after repairs to a leak discovered Thursday were completed, according to person familiar with matter.