The bearish positioning of oil traders in recent weeks has led to a sell-off on the market as speculators reduced bullish bets amid resurfaced concerns about the global economy and oil demand. The bullish sentiment from September, when the market was focused on the OPEC supply cuts, gave way to a bearish mood in the latter part of October and so far in November, as concerns about a supply crunch were replaced by renewed fears of weakening demand.
As a result, the bullish positioning of the fund managers in the two most traded crude futures contracts, Brent and WTI, slumped to a four-month low last week. OPEC and its leader and top producer, Saudi Arabia, insist demand remains robust and the oil sell-off from $90 to $80 a barrel Brent in past weeks was exaggerated amid “overblown” concerns about demand. The excessive piling of bearish positions could prompt Saudi Arabia to roll over its extra production cut of 1 million barrels per day bpd – or at least part of it – into 202