Oil Futures Edge Higher Early Monday

Brian L Milne
By  Brian L. Milne , DTN Refined Fuels Editor

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.

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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 brian.milne@dtn.com

(BM/CZ)

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Brian Milne