Oil prices were higher Tuesday after another strong rally in crude oil that was triggered by increased demand.
On Tuesday, Brent crude futures were up 1.27% at $36.03 per barrel at the time of writing.
In April, the world’s major producers, including Saudi Arabia and Russia, agreed to reduce their output by nearly 10 million bpd for May and June.
Speculators maintained strong buying interest in energy and metals at the expense of the agriculture sector, Saxo Bank said in the Commitments of Traders report on positions held and changes made by money managers in the week of May 19.
“Top three buys were WTI crude oil, natural gas and gold, while selling was topped by corn, soybeans and wheat,” Ole Hansen, head of commodity strategy at Saxo Bank, said in a note.
The analyst says another strong rally in crude oil saw the combined net-long in WTI and Brent rise by 26,000 lots to 507,000 lots, a 16-week high.
“Seven consecutive weeks of buying has resulted in bullish WTI bets rising almost three-fold to 348,000, a 20-month high, while Brent buyers have only added 102,000 lots to 158,000. While not yet overly stretched, the amount of buying has left the market exposed should the technical and/or fundamental outlook turn less friendly,” Hansen says.
Interest in Brent Muted
The analyst says buying interest in Brent has been much more muted.
“Following a four-week rally WTI crude oil has temporarily been boxed in between resistance at $35.20/bbl, the April high and support at $30.75/bbl, the uptrend from the lows,” adds Hansen.
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