Source: Brian Feroldi Oil market sentiment is nearing lows not seen since Covid 19 – a time when government lockdowns collapsed oil demand and fears of full storage sent oil prices briefly negative. Since peaking in June 2022 following Russia’s invasion of Ukraine oil prices are down 40% amid recession fears, despite rising global demand, rapidly depleting oil inventories and a tight physical market:
"Hedge funds and other “non-commercial” entities that speculate on oil prices in the futures markets are close to being net short oil futures, which did not even come close to happening during the depths of Covid."
Considering the strength of the fundamentals, wouldn't the above scenario increase the risk of short squeeze in the second half of 2023?
Recession Fears Mean Opportunity In The Oil Market
Great overview. You, Nuttall, Kuppy, Tony Greer, and J Polomny are my go to guys on this area of the market. Thanks for the fantastic summary.
"Hedge funds and other “non-commercial” entities that speculate on oil prices in the futures markets are close to being net short oil futures, which did not even come close to happening during the depths of Covid."
Considering the strength of the fundamentals, wouldn't the above scenario increase the risk of short squeeze in the second half of 2023?