After a strong Friday finish, energy markets are starting bracket week with a sell-off as they await monthly reports from OPEC and the IEA later this week, and a general drop in productivity in offices across the country.
Reports that Iran and Saudi Arabia are once again disagreeing on the ideal price for oil (in addition to disagreeing on most everything else) is taking some blame for the decline in prices this morning. The fact that refined products are selling off more heavily than WTI and Brent suggests there must be more to the story.
The third Nor’easter so far in March is bearing down on New England today, and is expected to hit on the 25th anniversary of the “storm of the century”. While forecasts suggest this latest storm will have a more narrow range than the previous 2, more than a foot of heavy wet snow is predicted so more power outages are likely in coastal New England.
Baker Hughes counted 4 fewer oil rigs last week, the first time in 7 weeks that the count has declined.
Money managers made small reductions in their net-long positions across the board last week with Brent, WTI, RBOB and ULSD all seeing relatively minor declines. Meanwhile, the net-short position held by swap dealers in WTI saw another small reduction but remains near its record low. To sum up the commitments of traders, speculators seem comfortable holding on to large bets that prices will go higher and the producers still like holding hedges against their future output in case the speculators are wrong.