OLD BRIDGE, N.J. (DTN) -- New York Mercantile Exchange oil futures nearest to delivery and Brent crude on the Intercontinental Exchange edged higher early Monday after shallowly mixed trade overnight following down moves to multi-week lows last week on concern over slowing demand growth amid trade tension between the United States and China, and a devaluating lira, Turkey's currency, that some fear could spill into Europe and slow economic growth.
A low-level meeting between U.S. and Chinese officials scheduled for this week eased those worries, while the fear of contagion amid Turkey's currency woes manifested due to a high debt load and stronger U.S. dollar were tamped down. The U.S. dollar, which reached a 13-month high against a basket of currencies in index trading last week, firmed slightly.
The latest Commitment of Trader's report released Friday afternoon by the Commodity Futures Trading Commission showed noncommercial accounts, also referred to as speculators, reduced net-long positions in NYMEX West Texas Intermediate, ULSD and RBOB futures during the week-ended Aug. 14. Open interest for WTI futures tumbled to a nearly one-year low.
"Seeing recent reductions in the amount of oil under hedge, there is a likelihood that the market will ultimately move higher as shorts come back into the market," said Al Levine, CEO and chairman of Washington, D.C.-based Powerhouse, a commodity hedge and trade advisory.
Near 9:00 AM ET, the September NYMEX WTI contract was little changed near $66 bbl and October ICE Brent was 23 cents higher at $72.06 bbl. September RBOB futures were up 1.2 cents at $1.9929 gallon, while September ULSD contracts traded marginally higher at $2.1004 gallon.
"In order to get any sense that the market is going to move higher, [WTI] crude has to advance beyond $67 bbl," said Levine.
Brian L. Milne can be reached at email@example.com
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