KBC Market Research Desk
KBC Bank
Crude
The price of oil fell only slightly yesterday after Petro Poroshenko clearly won last weekend’s election in Ukraine. The frontmonth contract on Brent (ICE) is thus still trading at elevated prices despite the fact that Poroshenko’s victory could somehow calm the tense situation in the country in weeks to come. On the other hand, the fighting between pro-Russian rebels and government forces was the fiercest so far yesterday when they fought for the control over Donetsk airport and the situation in Libya remains unresolved.
Quite interesting data confirming the bullish mood prevailing in the market was released by the ICE yesterday. The latest Commitment of Traders report unveiled that the difference between the number of speculative traders who are holding long and short positions remained relatively large last week as well as net position which was also seen close to a ten-month high. Although this might signal that the price of oil might be under modest downward pressure in weeks to come (due to calmer situation in Ukraine which might lead to rebalancing of risks), ongoing tensions between Libyan government rebels and upcoming meeting of the European Central Bank might to a large extent offset such effects.
Chart of the day:
Money managers positions (4 week moving averages) in Brent futures reached a ten-month high last week.
This non-exhaustive information is based on short-term forecasts for expected developments on the financial markets. KBC Bank cannot guarantee that these forecasts will materialize and cannot be held liable in any way for direct or consequential loss arising from any use of this document or its content. The document is not intended as personalized investment advice and does not constitute a recommendation to buy, sell or hold investments described herein. Although information has been obtained from and is based upon sources KBC believes to be reliable, KBC does not guarantee the accuracy of this information, which may be incomplete or condensed. All opinions and estimates constitute a KBC judgment as of the data of the report and are subject to change without notice.
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