Crude oil futures continued to slide on Monday, adding to the downwards move seen last week.
Front-month WTI futures currently trade down 0.68% at $48.16 a barrel, having dipped below the $48 level for the first time since late November earlier in the session.
That was the day OPEC announced lower production targets for the first half of 2017, sending crude prices hurtling higher.
From the high of $55.24 per barrel struck on January 3 this year, the WTI price has now skidded by close to 13%, undermined recently by renewed US dollar strength, increased US shale oil production and extreme long positioning among speculative investors.
Despite falling in the past two week’s, net long speculative positioning in NYMEX crude futures and options remains near-record highs, according to data released by the US Commodity Futures Trading Commission (CFTC) on Friday.
Net speculative positioning is simply the sum of long positions less short positions reported by the CFTC for non-commercial accounts.
This excellent chart from ANZ shows net positioning in WTI futures going back to 2012, comparing it to movements in crude prices over the same period.
Positioning is still very long, adding to risks of an even more pronounced decline in prices should further losses encourage traders to scale back their positioning.