crude oil to the lowest in more than nine months, data showed, as growing shale production kept inventories well above the five-year average.Money managers cut their net combined futures and options position in New York and London by 2,569 contracts to 157,291, the lowest since late September, in the week to June 27, data from the U.S.
Commodity Futures Trading Commission (CFTC) showed.Gross long positions rose slightly but the overall reduction came as gross short positions among money managers soared to the highest since mid-August, the data showed.
oil futures on the New York Mercantile Exchange rose by about 2.3 percent and averaged $43.20 per barrel during the trading days ended June 27.Crude oil inventories sit about 25 percent higher than the five-year average as output is still increasing in the United States, where some shale producers can profit even if oil prices drop below $40 a barrel.Last week, crude inventories rose by 118,000 barrels, compared with analyst expectations for an decrease of 2.6 million barrels.
In addition, an effort by the Organization of the Petroleum Exporting Countries and other top producers has largely failed to boost prices and erode a global glut, with output rising in Libya and Nigeria, OPEC members exempt from the cuts.Last month, OPEC and other countries extended the output cut deal for nine months.
Gulf Coast has caused demand on the Colonial pipeline to hit a six-year low."The net short position of 20,139 contracts near the bottom of the five-year range represents an oversold condition in our view," Tim Evans, energy futures specialist at Citi Futures said in a note.