WEEKLY ENERGY RECAP: Wake-up call for the oil industry

A flare stack is pictured next to pump jacks and other oil and gas infrastructure on April 24, 2020 near Odessa, Texas. (AFP)
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Updated 26 April 2020

WEEKLY ENERGY RECAP: Wake-up call for the oil industry

  • Money managers have increased their net-long positions in Brent crude futures and options.

The oil market has come through the most frenetic week in its history — especially so for the US WTI grade that controversially was allowed to fall into negative territory.
On April 20 it closed at an almost unbelievable minus $37 per barrel (for the end of May contracts) before recovering to $16.94 per barrel.
Despite the drama, the US measure finished the week only $1.30 lower than the previous week closing.
It was also a roller-coaster ride for Brent crude, which tumbled to a 21-year-low, first dropping to about $16 before recovering to $21.44.
Money managers increased their net-long positions in Brent crude oil futures and options by 22,665 contracts to 134,119 for the week ending April 21, which represents a six-week high. It will be interesting to see how many of the these options and futures will be translated into physical deliveries.
Although WTI plunged into negative history for the time, net long positions for US crude futures and options also rose by 51,991 contracts to 209,734 over the week. That represents a three-month high. So clearly the expectation is that US oil prices will rise.
The market anomalies of the last week again highlight the disconnect between underlying supply and demand for physical oil on the one hand and the trading of oil-based financial instruments on the other. It is a wake-up call for an industry long blighted by speculation.
As the world emerges from COVID-19 quarantines, oil market fundamentals will likely improve. But we should not forget the chaos of the last week and the urgent need for more transparent international oil benchmarks that it signals.


Scammers fool Britons with investment firm clones, says trade body

Updated 28 November 2020

Scammers fool Britons with investment firm clones, says trade body

  • Losses amounted to 9.4 million pounds ($12.56 million) between March and mid-October

LONDON: More than 200 British retail investors have lost nearly 10 million pounds ($13.4 million) in total to sophisticated investment scams since a government lockdown in March to fight the COVID-19 pandemic, a trade body said on Saturday.
Fraudsters cloned genuine investment management firms’ websites and documentation, and advertised fake products on sham price comparison websites and on social media, the Investment Association said.
Greater financial uncertainty and more time spent online have likely contributed to the increase in scams, industry sources say.
Losses amounted to 9.4 million pounds ($12.56 million) between March and mid-October, the IA said, based on information it got from member firms which had been cloned.
“In a year clouded in uncertainty, organized criminals have sought opportunity in misfortune by attempting to con investors out of their hard-earned savings,” Chris Cummings, chief executive of the Investment Association said.
The investment management industry was working closely with police and regulators to stop the scams, he added.
Britain’s Action Fraud warned earlier this month that total reported losses from all types of investment fraud came to 657 million pounds between September 2019 and September 2020, a rise of 28% from a year ago. Reports spiked between May and September, following Britain’s first national lockdown, the national fraud and cybercrime reporting center added.