The decrease in long positions in the Brent futures market to 204,000 lots as of September 29, 2023, indicates a continuing downward trend in this market. According to new data, traders have sold approximately 14,000 lots, marking the second consecutive week of decline in long positions.
Details of the Long Position Decrease
In the past week, net long positions in Brent futures have decreased by more than 7,000 lots. This amount is the smallest position recorded since early August. Analysts at ING Bank have noted that this situation has arisen due to new entries into the market and increased oil supply from Gulf producers.
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Reasons for the Decrease in Long Positions
Market analysts believe that the decrease in long positions is primarily due to new entries into the market. With increased oil flows from Gulf producers, traders tend to reduce their risk. According to ING analysts, signs of increased oil flow from the Gulf have led traders to avoid taking on high risk in these conditions.
While Brent oil prices remain high due to repeated attacks on critical energy infrastructure, commercial navigation in the Strait of Hormuz continues to face challenges. This combination of factors causes traders to carefully consider their positions.
A decrease in long positions typically leads to a decrease in oil prices. Conversely, when traders increase these positions, prices usually rise. This cycle reflects the impact of traders' actions on oil prices and the market.
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