Oil price with massive weekly losses – Commerzbank

Oil prices fell in the last week of trading, notes Carsten Fritsch, commodity analyst at Commerzbank.

Oil prices are falling sharply

“Brent fell to $70.6 a barrel on Friday, its lowest since March 2023, and closed at its lowest since December 2021. WTI hit a 14-month low of $67.2. Brent lost nearly 10% on the week, with the decline exacerbated by the contract’s rollover earlier in the month. Excluding this factor, the decline stands at 7.6%, which is the strongest weekly decline since October 2023.”

“The weekly loss for WTI was 8%, which was last seen about 11 months ago. Timing spreads, ie price spreads along forward curves, also narrowed considerably, although the narrowing was much more pronounced for Brent. On Friday, there was just 35 US cents between the top two Brent forward contracts and less than $1 between the nearest contract and the contract that expires six months later.

“Premiums for short-term oil delivery have never been lower this year. Therefore, market participants are much more relaxed about the oil market than they were a few weeks ago. This is also reflected in the behavior of speculative financial investors, who significantly reduced their net long positions in Brent and WTI in the week ending 3 September. According to ICE and CFTC data, they fell to their lowest level this year in last reporting. week.”