A brief tryst with bullish oil positions among professional investors appears to have been just that: Brief.
Some investment banks, though, are growing more bullish on the oil outlook for the rest of the year. For example, JP Morgan (NYSE: JPM) projects Brent crude oil to rise to $65 per barrel in the third quarter and $67 per barrel in the fourth, reports Arjun Kharpal for CNBC. Barclays analysts anticipate Brent to reach $61 per barrel in the third quarter and $66 per barrel in the fourth. Nevertheless, the bank warned of ongoing issues that may still cause short-term volatility, which contributed to their slightly lower forecast.
Looking ahead, oil observers expect the supply and demand dynamic to become more balanced in 2016. The Organization of Petroleum Exporting Countries also projected rising demand for oil this year and the next, which could “imply an improvement toward a more balanced market.” [Oil ETFs Look to Rally]
Even with some longer term optimism for oil, hedge funds and other professional speculators once again pared bullish oil bets last week.
“Money managers’ net-long position in West Texas Intermediate crude declined 11 percent in the week ended Aug. 11, U.S. Commodity Futures Trading Commission data show. Short positions climbed to the highest level since March, a signal speculators see prices continuing to fall. Funds curbed bullish bets on Brent in London to the lowest level since December, data from ICE Futures Europe showed,” reports Mark Shenk for Bloomberg.