Oil edges lower in thin holiday trade; banks warn of $30 levels ~ Market Updates Tips Tricks Recommendations

Monday 28 March 2016

Oil edges lower in thin holiday trade; banks warn of $30 levels

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Oil futures edged lower for a second straight session on Monday in thin trade as European markets observed the Easter holiday and as hedge funds and other big speculators were still hesitant to wager on a two-month long price rebound amid hefty crude inventories.

Sentiment in Brent and US crude’s West Texas Intermediate (WTI) futures remained soft with investment banks, such as Barclays and Macquarie, warning that market fundamentals were weak enough to pull prices back to $30 a barrel levels.

Brent settled down 17 cents at $40.27 a barrel. Reuters data showed trading in the London-based benchmark at just over 73,000 lots versus the 200,000 typical on a regular session.

New York-based WTI finished down 7 cents at $39.39.

Both benchmarks are up about 50 per cent from 12-year lows hit in mid-February.

Managed money’s gross long positions in WTI have barely risen since January and inched up by just 6,000 lots to around 300,000 lots in the week to March 22, CFTC data showed. The number of short positions slipped to nearly 64,000 lots, or around 64 million barrels of oil.

US crude inventories rose 9.4 million barrels in the week to March 18, three times larger than analysts’ expectations, to their sixth consecutive weekly record high.

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