Oil prices dipped slightly into Monday, back into $81/bbl handles, after seeing a 6% gain last week having fallen 9% a week previous, with heavy price swings very characteristic of the market at the moment.
Managed by money positions saw a removal in both longs and shorts in the benchmark Brent futures whilst WTI futures recorded a flip to bearish positioning in the week to Feb 06.
The Brent futures flat price for the prompt contract has seen a relatively weak morning. Price action initially found stability in the high $81/bbl-handles, reaching highs of $81.98/bbl at 05:30 GMT.
ONYX CFTC PREDICTOR – In addition to our regular Monday CFTC COT analysis report, Onyx Insight will publish its own in-house CFTC COT forecast ahead of the official Friday report.
The Apr Brent futures contract has seen increased support overnight with prices strengthening above the $79/bbl mark and seen at $79.14/bbl at 10:00 GMT (time of writing). Apr WTI saw a similar upward momentum with prices at $74/bbl at 10:00 GMT.
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The Apr Brent futures contract has been very volatile over the day and seems to be moving sideways amid a mixed bag of news. The contract was seen trading around the $77.50/bbl handles and dropped to a daily low of $76.63/bbl at 14:50 GMT. At 17:00 GMT (time of writing), prices were trading at $77.38/bbl.
The resurgence of strength following a blip during expiry has allowed for the Dated market to enter February with strong buying in the face of a risk/reward skew previously thought bearish.
After last weeks bearish run saw a crash from geopolitical risk derived highs, Onyx research suggests cautious room for growth in Brent as tensions in the Middle East escalate.
Managed by money positions in Brent futures reverted to the buy-side in the week to Jan 30 as length increased and shorts were reduced. Similar to this, WTI continued to see a bullish positioning.
With a forecasted cold snap in Europe a bullish run is expected in the prompt TTF contract.
The Apr Brent futures contract has been very volatile over the day with prices constantly between the $81/bbl and the $81.50/bbl marks. At 17:00 GMT, it was trading at $81.30/bbl. At 18:00 GMT (time of writing), prices have dipped below the $80/bbl mark to be priced at $78.96/bbl.
The Brent futures flat price for the Apr contract has seen a minor rally this morning. Initially price action was seen weakening to $80.19/bbl at 08:40 GMT, however this spurred some buying interest, taking the contract to above the $81/bbl mark, reaching $81.19/bbl at 09:20 GMT.
The Brent futures flat price for the April contract has seen a weaker afternoon, as prices fell from $82.23/bbl at 14:20 GMT to lows of $80.56/bbl at 16:45 GMT, before recovering slightly to just shy of the $81/bbl mark at 17:00 GMT.
