What's Moving the Oil Markets?

What's Moving the Oil Markets?

•Funds have stopped taking long positions, which had been keeping crude above $70/barrel, allowing for a further drop in prices on bearish sentiment. A great deal of risk premium has been eroded from the crude complex but brokers say that there is still some premium that still has to work it's way out as bearish sentiment continues to dominate the market.

•Brokers also talked of the lack of support being offered to the crude complex by product cracks with European Naphtha, gasoline and fuel oil cracks trading at a low ebb. Europe also seems well stocked for heating oil and gasoil, traditional winter drivers, with strong demand seen in August now trailing away as tanks begin to fill up. One trader noted that gasoil demand in August was 10% higher than the same time last year.

• Also providing support on the downside is the refinery turnaround season expected towards the end of September and early October with demand for crude from refineries expected to come off as a result.

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