The oil market rally was being driven by supply-side risk linked to simmering tensions in the Middle East, and the rally was being fed through buying flows from Commodity Trading Advisors (CTAs), notes Ryan McKay, Senior Commodity Strategist at TDS.
CTAs are ready to sell 10% of their maximum position in WTI crude oil
“The oil market rally was being driven by supply-side risk linked to simmering tensions in the Middle East, and the rally was being fed through CTA buying flows.”
“However, we note that risk premiums associated with tensions in the Middle East tend to erode rapidly without an escalation into a broader conflict, and with systematic flows reaching elevated long-term levels, the lack of persistent buying will likely soon weigh on the market. Indeed, CTAs are poised to sell approximately 10% of their maximum WTI crude position, with the $80/bbl region serving as additional key selling levels.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
