- Crude oil rallies after logging the longest run of declines in more than three years that settled below $63/Bbl on Friday
- The Delta variant coronavirus continues to impact nations around the globe, but China has made progress in containing the spread (Bloomberg)
- U.S. drilling rigs climbed by three to 503 last week; up 249 from 2020
- Market Calls (GS, BofA):
- Goldman maintains its 4Q Brent price target of $80/Bbl
- Oil has sold off the past three weeks as delta concerns clouded the outlook for demand, according to Goldman Sachs
- However, prices “have overshot timespreads to the downside, suggesting an oversold market,” the bank said in a note (Bloomberg)
- In an Aug. 19 report, BofA said OECD oil inventories are the lowest in more than five years, but more steep draws are unlikely due to the effect of Covid-19 Delta variant
- Prices are likely to remain rangebound in 2H
- Brent curve set to be flatter into winter with distillates dragging crude down, BofA said in the report
- Money managers cut their outright long positions in WTI to the lowest since April 2020
- The speculator net position is the smallest since November 2020
- The biggest movement in WTI saw a reduction of 78k spread positions in the “other reportable category,” the most since May