April 02, 2024 [Bloomberg]- Oil rose on signs of better-than-expected demand, while algorithms that have reached their maximum long positions kept the rally in check.
West Texas Intermediate rose as much as 0.9 per cent to trade near US$84, reaching the highest intraday price since Oct. 30. Unexpected resilience in European oil demand is bolstering prices, according to Goldman Sachs Group Inc. Adding to the tailwinds, China’s industrial activity rebounded in March to snap a five-month decline, stoking expectations that oil consumption in the world’s biggest crude importer might be rebounding.
Yet traders are keeping a close eye on a potential reversal after money managers poured heavily into oil the previous week. Brent long positions rose to the highest in more than a year last week, according to figures from ICE Futures Europe. Algorithms for the global benchmark reached their maximum long positions, according to data from Bridgeton Research Group.
Crude surged 16 per cent in the first three months of the year as markets focused on strong consumption. The Organization of Petroleum Exporting Countries and its allies have also cut back supplies, helping offset the impact of increased flows from outside the cartel. The group is expected to affirm its current output policy at an online review meeting scheduled for Wednesday.
Trading volumes are likely to be thin in the week’s opening session, with many economies including the UK away for Easter Monday.
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