Throughout the week to 22 Oct, the Dec’24 Brent futures contract initially saw a lack of strength, trading around $74.50/bbl levels and moving down to an intraday low of $72.90/bbl on 18 Oct. However, the Dec’24 contract regained some support since, trading at $76.25/bbl at the time of writing on 24 Oct.
Prices were pressured down throughout most of the week amid ongoing concerns of poor Chinese oil demand and pessimism surrounding the efficacy of China’s monetary stimulus for the real economy, alongside a lack of clarity when it comes to fiscal policy.
In spite of this, Brent futures found strength at the end of the week on heightening geopolitical tensions in the Middle East. In line with this increasing strength, Onyx’s weekly CFTC COT predictor anticipates a boost in speculative long positions in Brent alongside a modest reduction in shorts for the week ending 22 Oct.
In addition, we anticipate producer/merchants to increase both long and short positions in Brent futures by 30.3mb and 42.1mb, respectively, indicating an increase in hedging.
