Crude oil prices settled down more than 1% today, snapping two consecutive days of gains, on renewed concerns about an oil glut, a stronger dollar and expectations that Nigerian rebels will stop hampering that country's crude output.
Crude oil traders not only have to grapple with the aftermath of Fed Chair Janet Yellen, but also with more storms that could impact both supply and demand. This comes after hedge funds, who started the month with a record short position, have now turn around into a record long position.
Crude oil and natural gas will be looking to deal, not only with watching the weather but also watching Fed Chair Janet Yellen in Jackson Hole, Wyoming. This as the market saw movements from the Saudi Oil Minister and trying to measure the risk of fallout from increasing tensions with the U.S. and Iranian military.
The bulls are back and the bears are in trouble. The crude oil market enters bull market territory just 3 weeks after dipping into bear land. It looked like a classic short squeeze ahead of the September crude oil expiration and it is clear some traders had it all wrong.
While there was a lot of talk about Friday’s Baker Hughes rig count, it is what they did not tell you that may be what counts. On Friday, Baker Hughes reported that the number of active U.S. oil rigs increased by 17--the seventh weekly increase and the most in a year.
With concerns still elevated over a potential decline in demand amid slowing global growth, most upside gains observed in oil could be capped. The terrible combination of oversupply woes and fears that demand may be waning could provide a foundation for bears to send WTI crude to unseen levels.