As Oil Prices Rise, Are Oil Bulls Too Optimistic?

Optimism, at first tentative and in the last week more
pronounced, has been taking over oil markets. Short positions on
WTI were at a three-month low as of Monday, according to Bloomberg,
while long positions continued to rise. The last couple of weeks
have seen some strong indications that the oil market is returning
to balance. The latest OPEC meeting with Russia in St. Petersburg
on July 24 had Saudi Arabia pledge to further cut its crude exports
from this month, and Russia’s Energy Minister said that global
inventories have shrunk by…

Optimism, at first tentative and in the last week more
pronounced, has been taking over oil markets. Short positions on
WTI were at a three-month low as of Monday, according to Bloomberg,
while long positions continued to rise. The last couple of weeks
have seen some strong indications that the oil market is returning
to balance. The latest OPEC meeting with Russia in St. Petersburg
on July 24 had Saudi Arabia pledge to further cut its crude exports
from this month, and Russia’s Energy Minister said that global
inventories have shrunk by…