WTI oil trading near $74, investors eye US oil stocks

WTI oil prices open Tuesday’s trading session near the $74 a barrel mark, nearly three dollars under current Brent oil prices as investors eye US oil stocks and guess at future demand predictions.

US Light crude oil futures for October 2010 delivery was at $74.04, 07.45 GMT on the NYMEX after closing lower yesterday.

“The difference between the most optimistic economic outlook and the reality of US oil inventory overhangs has been getting worse and worse all year long. The market remains strong while the oil surpluses expand and the economy stagnates and gets weaker.” said Peter Beutel, president of Cameron Hanover, said in a note to investors.

WTI Oil Prices Struggling

“Given the weakness of US oil fundamentals and the likelihood the US economy will continue to struggle, it is difficult to envisage a sustained rally in crude oil futures.” analysts at UK based consultancy KBC Energy Economics said.

Meanwhile, the US CFTC (Commodity Futures Trading Commission) commented that money managers had cut their net long position in NYMEX WTI oil futures by 2.7% in the week ending 31st August, which could signal further position liquidation.

“Most of the action was in WTI crude oil, with significant increases in fresh speculative short positions.” said Olivier Jakob, managing director of Swiss consultancy Petromatrix.

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