Correction potential for oil is growing all the time - Commerzbank

Analysts at Commerzbank warn investors that oil prices are at a risk of a sharp downside correction, and hence, should not get too comfortable above $ 50 mark.

Key Quotes:

“The oil market is currently characterized by rather selective perception: bearish news such as the rising U.S. crude oil and product stocks is being ignored, as is the increase in U.S. oil production. Instead, even the most insignificant report of tightening supply—like yesterday’s news from the [North Sea Buzzard oil field in the U.K.]— is being seen as an opportunity to buy.” 

“Given that speculative net long positions in Brent and WTI are already at a record-high level, the correction potential is therefore growing all the time.” 

“The CFTC’s market positioning data that are due to be published this evening are likely to reveal a further increase in speculative interest in WTI. New figures from Baker Hughes should also indicate another rise in drilling activity in the US, which will probably be ignored.”