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Crude Oil Price Movements

4

OPEC Monthly Oil Market Report – September 2017

Table 1 - 2: Crude oil futures, US$/b

As WTI futures rose during the 1st week in August, touching over $50/b for the first time since May, hedge

funds and other

money managers

raised their net long WTI crude futures and options positions, according

to CFTC data. Hedge funds raised combined futures and options positions by 43,861 contracts to

282,362 lots during the period. The level was the highest seen since mid-April. Hedge funds and other

money managers also raised their net long positions in futures and options contracts in Brent futures by

53,777 contracts to 342,348 lots during the same period.

Subsequently, hedge funds and money managers trimmed their bullish bets on WTI crude futures and

options positions for the third straight week. During the week of 29 August, the speculator group cut its

futures and options net long positions by 105,671 lots to 147,303 contracts, the highest amount in about a

month, the CFTC said. Money managers also slightly reduced Brent futures and options contract net lengths

by 1,296 lots to reach 416,551 contracts during the same week. This continued strength in Brent futures and

options net lengths is likely connected to a sudden tightening of inter-month spreads, which saw Brent move

from contango into backwardation between October and December. More generally, Brent inter-month

spreads have tightened much more than WTI’s since the last week of July, which has made Brent more

profitable for hedge fund managers with long positions. Total futures and options open interest volume in the

two exchanges was down at 5.66 million contracts.

Graph 1 - 2: NYMEX WTI vs. Managed money net

long positions

Graph 1 - 3: ICE Brent vs. Managed money net

long position

The daily average

traded volume

for NYMEX WTI contracts increased further by 128,898 lots, or 9.3%, to

1,509,803 contracts, while that of ICE Brent was 89,643 contracts higher, up by 10.5% at 941,999 lots.

Daily aggregate traded volume for both crude oil futures markets increased by 218,541 contracts to

2.45 million futures contracts. In August, total traded volume for NYMEX WTI and ICE Brent futures were

higher at 34.73 and 21.67 million contracts, respectively.

Jul 17 Aug 17

Aug/Jul

%

2016

2017

NYMEX WTI

46.68

48.06

1.38

3.0

41.06

49.30

ICE Brent

49.15

51.87

2.72

5.5

42.65

52.14

Transatlantic spread

2.47

3.81

1.34

2.57

1.59

2.84

Note: Totals may not add up due to independent rounding.

Change

Year-to-date

Sources: CME Group, Intercontinental Exchange and OPEC Secretariat.

0

100

200

300

400

500

600

20

30

40

50

60

Aug 16

Sep 16

Oct 16

Nov 16

Dec 16

Jan 17

Feb 17

Mar 17

Apr 17

May 17

Jun 17

Jul 17

Aug 17

Sep 17

US$/b

Managed money net long positions (RHS)

NYMEX WTI (LHS)

'000 Contracts

Sources: CFTC , CME Group and OPEC Secretariat.

0

100

200

300

400

500

600

20

30

40

50

60

Aug 16

Sep 16

Oct 16

Nov 16

Dec 16

Jan 17

Feb 17

Mar 17

Apr 17

May 17

Jun 17

Jul 17

Aug 17

Sep 17

US$/b

Managed money net long positions (RHS)

ICE Brent (LHS)

'000 Contracts

Sources: Intercontinental Exchange and OPEC Secretariat.