Speculative net long positions in WTI fell to lowest level since November 2012

Speculative net long positions in WTI fell by an additional 17,600 to 82,600 contracts in the week to 18 August. This is the eighth decline in the past nine weeks, and also the lowest level since November 2012. The corresponding data for Brent are likely to paint a similar picture when they are published at lunchtime today. 

The oil rig count in the US climbed for the fifth consecutive time in the last reporting week, though this is probably still a consequence of the significantly higher oil prices of roughly $60 per barrel in May and June. That is clearly the level of the marginal costs of production for new oil rigs. At the current prices of less than $40, shale oil producers are likely to scale back drilling activity considerably, meaning that a sharp decline in the oil rig count can be expected in the autumn at the latest, says Commerzbank in a report on Monday.