Oil: Hedge funds are cutting their long positions and wait for the price drop

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Oil remains expensive, Brent is trading near the yearly high, as well as the psychological level of $ 80 per barrel. Technically, the bullish trend is still relevant, and the goal is in the area 81,56 dollars per barrel, however, given the duration of the trend is not excluded the beginning of the correction. Moreover, the reasons for it.
Hedge funds continue to reduce net long position in Brent fifth week in a row, which is the longest period of declines since November of 2016. It is not excluded that investors want to wait out the upcoming meeting of OPEC+, and profits. If the cartel will be consistent in action, then investors can recover purchase.
Also Tuesday, data released by API. Crude oil inventories fell, but analysts did not materialize. The growth in US production continues to grow, evidenced by periodic data from the Ministry of energy and the increase in active rigs from Baker Hughes. According to the latest data, they became 844 pieces. Against oil also plays a strengthening of the us dollar.
Positive factors are still geopolitical risks in the middle East. Sanctions by the USA against Iran, and degradation production in Venezuela, again, including due to sanctions from the United States.
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Ivan Kapustyasky,
Senior analyst,
Forex Optimum