• Brent Oil lower by more than 1.5% on the day
  • Last Monday saw the market hit 2-year high
  • Speculative long positioning at highest level in a year

There’s been some notable selling seen in Brent Oil so far today with the market falling back below last week’s low. The first trading session of the week is in stark contrast to the previous Monday for Oil, with just seven days ago price breaking higher to trade at its highest level since July 2015. 

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 Last week saw price make a false break higher, peaking at 58.85. Source: xStation

The high point of 58.85 marked an incredible rise of more than 16% in less than a month but the recent weakness has seen a significant portion of the gains handed back. Price has now fallen back to the 38.2% fib retracement of the move higher at 55.67 and should this break then the 50% point at 54.69 could be tested in the not too distant future. 

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 Brent Oil is now close to the 38.2% retracement of the latest move higher at 55.67. Source: xStation

 The rejection of last week’s advance will be a cause for concern amongst Oil bulls, and a look at the most recent positioning data could cause further anxiety. The net positions in ICE Brent Crude have hit a 52-week high above 500,000 and the long side of this trade is now looking incredibly crowded. Should there be much more downside in the coming sessions we could get a situation where these longs scramble to cover and this would exacerbate the declines. 

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 Speculative positioning in ICE Brent Crude is at a 52-week high. Source: CFTC Bloomberg