What’s Affecting Oil Prices This Week? (July 25, 2022)

Recent data still indicates a further slowdown in economic growth and oil demand, which Stratas Advisors said will be the most important factor impacting the direction of future oil prices.

John E. Paisie, Stratas Advisors
What’s Affecting Oil Prices This Week? (July 25, 2022)

Additionally, now that oil traders have reduced their net long positions to the lowest level since April 2020, oil traders are reversing this trend, according to Stratas Advisors latest oil price forecast. (Source: Shutterstock.com)

The price of Brent crude ended the week at $103.20 after closing the previous week at $101.16. The price of WTI ended the week at $94.70 after closing the previous week $97.59.

In our weekly note of June 13, we highlighted that the oil demand will be the most important factor impacting the direction of future oil prices. And the recent data is still indicating further slowdown in economic growth and oil demand. However, as we pointed out last week, while there are a number of factors putting downward pressure on oil prices, there are also factors providing upward support for oil prices.

Additionally, now that oil traders have reduced their net long positions to the lowest level since April 2020, oil traders are reversing this trend. Last week, traders of WTI crude increased their net long positions by increasing their long positions, while reducing their short positions. This is the second consecutive week of increases after the steep decline that occurred during the previous four weeks. Even with the increase the net long positions remain at the lowest level since April 2020. Similarly, traders of Brent crude increased their net long position by increasing their long positions, while reducing their short positions.

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