WTI - Investors Rush To Short Oil Amid Saudi Arabia's Brent Crude Price Reduction | Benzinga
In a move that has sent shockwaves through the oil market, Saudi Arabia has drastically reduced oil prices, leading to a significant increase in short positions in both Brent crude and West Texas Intermediate crude.
What Happened: Short positions in Brent crude and West Texas Intermediate crude jumped by 61,000 in the past week, marking the largest increase since March of the previous year. This surge is largely attributed to the price cuts implemented by Saudi Arabia for its flagship crude product, reported Business Insider.
The state-operated oil powerhouse, Saudi Aramco, has slashed the February official selling price of its Arab Light Crude to a two-year low for Asian buyers.
Major commodities funds are expected to shed U.S. crude futures contracts in a new-year rebalancing move. Following the Bloomberg Commodity Index and the S&P GSCI, these funds could potentially offload roughly $2 billion worth of futures contracts this week, according to a Citigroup estimate cited by Bloomberg.
Analysts speculate that the Saudi price cut could signal a decrease in crude demand or an effort to undermine the West’s growing crude production with a “market share war.”
This development sparked a 3% dip in oil prices on Monday. Brent crude dropped to roughly $76 a barrel, while ...