| At 10:50 am Singapore time (0250 GMT), the ICE March Brent futures contract was up 5 cents/b (0.06%) from the previous close at $86.11/b, while the NYMEX February light sweet crude contract rose 32 cents/b (0.38%) at $84.14/b.
Following strong gains over the last four weeks, the front month ICE Brent and NYMEX light sweet crude contracts were now a hair’s breadth from 3 and 7-year highs, respectively, reached in late October. Nonetheless, analysts cautioned that higher oil prices will also bring back the risk of political intervention. Governments of major oil consuming nations have been vocal in recent months about the risks surging oil prices pose to their economies and consumers, with the Biden administration orchestrating in late November a coordinated oil reserve release among several countries.
The latest market positioning data shows that speculators increased their net long in ICE Brent significantly over the last reporting week. The managed money net long increased by 43,019 lots over the week, leaving speculators with a net long of 249,927 lots as of last Tuesday. This increase was driven predominantly by fresh buying. NYMEX WTI also saw an increase in speculative positioning. Speculators increased their net long in WTI by 21,449 lots, leaving them with a net long of 287,826 lots at the end of the reporting week. (ING)
The latest data from Baker Hughes shows that the US oil rig count increased by 11 over the last week. This takes the total number of active oil rigs in the US to 492, which is a 186% increase from the lows seen in August 2020. While the count still has some distance to go before reaching pre-Covid levels (683 in March 2020), the current price environment should ensure that we continue to see the rig count trending higher. (ING)
OIL MARKET ROUND-UP: (Bloomberg)
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