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Beawiharta Beawiharta / Reuters
- Oil futures fell on Monday, their longest drop since April, as Saudi Arabia made sharp price cuts for crude destined for Asia to help stimulate demand.
- Moderna, a candidate for the COVID-19 vaccine, said it would slow down its enrollment in the trial to ensure sufficient representation of minorities most at risk of contracting the virus.
- Money managers have become increasingly bearish on energy contracts in the week through Sept. 1, according to data from Saxo Group.
- Among energy contracts, Brent crude and New York Harbor diesel led fund managers’ net selling positions through early September.
- Visit the Business Insider home page for more stories.
Oil prices fell to their lowest level since late July on Monday, when Saudi Arabia slashed the prices of its crude sales to Asia to offset lower demand among some of the world’s biggest consumers, such as China.
The world’s largest exporter cut prices for the second month in a row to help boost demand for its crude.
The US benchmark West Texas Intermediate index fell 1.4% to $ 39 in European morning trading and the global benchmark Brent crude fell 1.4% to $ 42 for the fourth consecutive day in its longest drop since all-time. April price drop.
State oil producer Saudi Aramco lowered its October Official Selling Price (OSP) for shipments to Asia by $ 1.40 a barrel at a discount of 50 cents a barrel to the Middle East regional benchmark for crude.
Aramco cut prices to Europe by 20 cents and those to the United States by 60 cents, which Carsten Fritsch, an oil analyst at Commerzbank, said could be interpreted as a sign of weak demand.
Read more: Bank of America presents the indicators that are below the radar that show that large swaths of the stock market are ‘running with smoke’, and warns that a September crash could be beginning.
In an environment of investors eagerly awaiting a COVID-19 vaccine, the American biotech firm Moderna said it would slow down the enrollment of its vaccine trial to ensure adequate representation of minorities most at risk of contracting the virus.
“Oil prices didn’t like the latest vaccine news as Moderna says it is slowing down the latest trial to ensure diversity,” said Stephen Innes, Axitrader’s chief global market strategist.
Weekly data from the US Commodity Futures Trading Commission showed that fund managers have cut their bullish bets on the energy complex in the last week.
Brent crude and US diesel were the top sellers by money managers in the week ending Sept. 1, according to Saxo Bank.
“Crude oil’s failure over the past month to break higher despite several favorable price developments had left the sector increasingly exposed to profit-taking,” wrote Ole Hansen, Saxo’s head of commodity strategy. Bank.
The Labor Day holiday in the United States ushered in a period of low demand, a risk of rising stock piles and increasing contango, he said, implying that investors are concerned about the balance between the supply and demand.
“Abundance of supplies, fears of easing OPEC + compliance, the end of the US driving season, and long stagnant positioning have combined to erode confidence in oil,” said Jeffrey Halley, OANDA Senior Market Analyst.
Halley said he was now expecting “massive declines,” but with signs of a global recovery likely to increase, both Brent crude and WTI should find some stability at lower levels.
A structural rebound in oil prices can only occur if the dynamics that led to the price declines are materially adjusted, he said.
Read more: ‘It has never been so extreme’: A renowned bear says that today’s ‘hypervalued’ market implies the worst market returns in history, and expects a 66% drop from current levels
