 |
Louisiana Light • 2 days | 72.80 | +1.46 | +2.05% | ||
|
Bonny Light • 29 days | 78.62 | -2.30 | -2.84% | ||
|
Opec Basket • 2 days | 72.77 | +0.35 | +0.48% | ||
|
Mars US • 319 days | 75.54 | -1.36 | -1.77% | ||
|
Gasoline • 10 mins | 1.983 | -0.019 | -0.94% |
|
Bonny Light • 29 days | 78.62 | -2.30 | -2.84% | ||
|
Girassol • 29 days | 79.56 | -1.80 | -2.21% | ||
|
Opec Basket • 2 days | 72.77 | +0.35 | +0.48% |
|
Peace Sour • 2 hours | 66.96 | +0.94 | +1.42% | ||
|
Light Sour Blend • 2 hours | 66.21 | +0.94 | +1.44% | ||
|
Syncrude Sweet Premium • 2 hours | 70.96 | +0.94 | +1.34% | ||
|
Central Alberta • 2 hours | 67.96 | +0.94 | +1.40% |
|
Eagle Ford • 2 days | 66.57 | +1.44 | +2.21% | ||
|
Oklahoma Sweet • 2 days | 66.50 | +1.25 | +1.92% | ||
|
Kansas Common • 2 days | 56.92 | -3.33 | -5.53% | ||
|
Buena Vista • 5 days | 75.40 | -0.32 | -0.42% |
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Oil Net Short For First Time in History
Brent crude oil is currently priced at $72.14 per barrel, showing a slight increase of $0.17 (+0.24%) for the day. However, behind this small rise is a much larger story unfolding in the oil markets.
According to energy investor and market commentator Eric Nuttall, the financial demand for oil, known as "net length," has dropped to its lowest point in history. Essentially, "net length" refers to the difference between the number of investors betting oil prices will rise (long positions) versus those betting they will fall (short positions). When net length is low, it means there is a reduced belief that prices will increase.
What's even more striking is that, for the first time ever, the paper market for Brent crude is "net short." This means there are now more investors betting that oil prices will fall than those expecting them to rise. This is significant because it's rare to see such pessimism in the market, especially when physical global oil inventories are falling at a rate of about a million barrels per day.
Why does this matter? Typically, when oil supply is low, prices tend to rise due to scarcity. However, the current setup is unusual—while physical oil barrels are declining, the financial market appears to be betting on lower prices. For contrarians who thrive on going against the crowd, this could signal an opportunity. They may believe the market is underestimating the potential for future price increases, given the tight supply situation.
This tension between the financial and physical sides of the oil market suggests that volatility and price swings may be on the horizon. Keep an eye on these dynamics as they unfold.
By Julianne Geiger for Oilprice.com
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Julianne Geiger
Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.
Related posts
Open57.81
Trading Vol.6.96M
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1- Oil is here to stay. It will continue to drive the global economy through the 21st century and probably far beyond.
2- The oil market fundamentals are solid and global demand is robust. Current oil prices aren't reflecting this fact now but they will soon.
3- Oil prices are coming under considerable pressure from the United States and its cahoots to
depress them and also from environmental activists, the ESG, the EU Secretariat, and the IEA to reduce investments in exploration and production. However, this can only lead to shortages
sooner or later.
4- Prices will soon recoup their losses despite market manipulation and environmental pressures.
Dr Mamdouh G Salameh
International Oil Economist
Global Energy Expert