Titan Inv Partners – Why we think we are approaching a buying opportunity for oil

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According to recent data published by the US Futures Trading Commission, hedge funds and large speculators continued to cut their bullish bets on oil, in fact by the most in six weeks. It seems that the bulls are losing further confidence that producers will cut their production by a sufficient volume to halt the price decline.

Hedge funds in fact cut their net-long positions on WTI oil by 8.1% in the week ended October 14 whilst they increased short positions to the highest level in 22 months.

A mix of events is weighing negatively in oil prices, and which, while likely to lead to further price declines over the next few weeks or months, in the longer-term is very likely to put a floor under prices as OPEC members look to regain their control over the oil price.

Shale cross profile

The major revolution that is going on is in shale oil drilling. This has allowed the US to achieve the highest oil output in 29 years, with the country now producing 8.95 million barrels a day. Experts expect these numbers to rise to 9.5 million barrels a day over the next year and the country to become a net exporter of oil in the near future – a situation that has not been the case for a couple of decades.


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