Bloomberg reports that oil bulls are losing faith in its recovery.
Speculators reduced their net-long position in West Texas Intermediate crude by 9.1 percent in the week ended Sept. 29, according to data from the Commodity Futures Trading Commission. Longs dropped from a 12-week high while shorts increased.
While US crude output is down 514,000 barrels a day from a four-decade high reached in June, Russia’s production of crude and condensate rose to 10.74 million barrels a day last month, 1 percent more than a year earlier and breaking a record set in June.
"The US producers are the only ones doing their part to reduce the global glut," John Kilduff, a partner at Again Capital LLC, said.
Rob Haworth, a senior investment strategist in Seattle at US Bank Wealth Management, told Bloomberg by phone: "The managed money has been positive about the market but things look grim. We’re at a tough time for oil on a seasonal basis as well."
Amid the widespread pessimism, though, West Texas Intermediate crude futures have, after plunging to $37.75 a barrel on 24 August 24, averaged $44.99 after that, staying above $44 since the start of September. Jim Rogers sees this as a sign of a possible rebound.
“When there’s bad news and something doesn’t decline, it usually means it’s at a bottom and will be turning,” Rogers said in an interview on Thursday. “Whether we’re at a turning point or not, I don’t know yet, and I’m watching this very closely.”
Rogers also sees opportunities for investors in other raw materials, particularly agriculture.
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