- Crude oil sees the most volatility of any market this morning, with WTI -2.6% at ~$47.80/bbl as analysts doubt upcoming producer talks would cure the oversupply problem and say August's 20%-plus crude rally looks overblown.
- Oil prices of $50/bbl or higher are unsustainable because of the ongoing production and storage overhang in fuel markets, and likely will experience another short-term dip in the coming weeks, Barclays says.
- "Positioning data seems to confirm our view that the latest oil bounce is more technical and positioning-oriented than fundamental. In fact, new buyers have been mostly absent the past few months," Morgan Stanley says.
- Adding to the outlook of plentiful supplies, the U.S. oil rig count rose by 10 last week and has climbed 28% from its May trough.
- Other factors include reports that Iraq is increasing oil exports by ~150K bbl/day (5%) as a pipeline dispute is being resolved, increased exports out of China, a stronger dollar, and the possible exhaustion of short-covering.
- ETFs: USO, OIL, XLE, UWTI, UCO, VDE, ERX, DWTI, OIH, SCO, XOP, BNO, DBO, ERY, DIG, DTO, USL, DUG, BGR, IYE, IEO, FENY, DNO, PXE, FIF, DBE, OLO, PXJ, RYE, SZO, NDP, GUSH, DRIP, DDG, RJN, FXN, OLEM, CRAK