January crude futures on the New York Mercantile Exchange opened 96 cents
higher at $94.80/barrel Monday on a combination of weakness in the US dollar
and a fire in a Saudi Aramco gas pipeline over the weekend that killed 28
people.
Tight supply at Cushing, Oklahoma--delivery point of the NYMEX
contract--continues to underpin prices while the backwardation provides the
ongoing aversion to storing inventories.
"Despite today's slightly higher tone...most markets have backed off from
recent highs, and we doubt a retest of these highs will occur so soon. We say
this based on last week's CFTC net long readings, which fell sharply over the
past week. Moreover, open interest readings have continued to decline since
then, suggesting that new longs have not been coaxed back in despite the
stronger prices we saw on both Thursday and Friday of last week," Edward Meir,
analyst at MF Global, said in a report.
Non-commercials, which are primarily comprised of hedge funds, liquidated
an unprecedented 78,250 contracts of crude futures on NYMEX, leaving them just
long 27,566 lots as of the week ended November 13, according to data released
Friday by the US Commodity Futures Trading Commission. "Last week saw the
largest single weekly drop ever, down 343,000
contracts," Timothy Evans, analyst at Citibank, said in a report.
December heating oil futures on NYMEX opened the session 2.09 cents
higher at $2.6080/gal and the RBOB contract opened 1.71 cents higher at
$2.3925/gal.
--Funda Saygin, funda_saygin@platts.com