Iran and Venezuela mounting more pressure on crude’s bearish trend

Oil prices are beginning the new week of trading with significant losses. Brent has fallen by 2% to $43.7 per barrel, while WTI has even shed more than 3% to reach $40.6 per barrel. Thus the rise in the WTI price following the contract rollover has already been corrected again.

Crude oil prices are now trading only marginally above last week's three-month lows. In view of the ongoing price weakness, pressure is mounting on OPEC, whose members will be gathering for their scheduled meeting at the end of next week.

Ahead of the meeting, Iran and Venezuela are attempting to pressurize on the other OPEC countries.

Venezuela's oil minister believes that prices will fall to the mid-20s if the current production quantity is confirmed.

Iran has drawn attention to the planned increase in its production following the lifting of sanctions, though does not itself expect OPEC to decide to change its production policy on 4 December.

Prices are therefore likely to decrease further in the run-up to OPEC's meeting.

Given this outlook, financial investors are withdrawing from their oil investments: speculative net long positions in WTI were reduced by 28,600 to 110,000 contracts in the week to 17 November.

This puts them at their lowest level since the end of August, when WTI recorded its 6½-year low. The corresponding figures for Brent are also likely to show that net long positions have been noticeably reduced following their increase in the last two weeks.