WTI oil price trading near $73, time to get long on oil?

WTI Light oil prices start the week trading higher, near $73 a barrel amid a lighter session as the US markets are closed for the 4th July holiday and some traders consider getting long on oil.

US WTI Light crude oil futures were at $72.67 a barrel in early trading in Asia as investors took the view that oil’s biggest weekly drop in several months made the commodity attractive to buy.

Crude oil prices fell the previous six trading days and dropped over eight percent last week amid ongoing fears about possible double dip recessions around the globe.

“Traders are investing in cheap crude following a plunge in oil prices last week. I think because oil prices have already been falling so much, there would be a rebound as longer term investors buy into the market,” said Serene Lim, a Singapore based oil and gas analyst with Australia’s ANZ bank.

“There will be the longer term participants in the market who are viewing this decline in oil prices as a good time to get long.” said Toby Hassall, a commodity analyst at CWA Global Markets Pty in Sydney.

Hedge fund managers and other large speculators decreased their net long position in New York crude oil futures in the week ended June 29th 2010, according to US Commodity Futures Trading Commission data.

Speculative long positions, or bets that oil prices will rise, outnumbered short positions by 37,120 contracts on the NYMEX, the CFTC said in its Commitments of Traders report.

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