Oil prices to see more volatility as 2018 ends: EmiratesNBD

With markets winding down for the end of the year, liquidity is expected to wane from the oil market causing more volatility in oil prices, Emirates NBD noted in its latest report.

Noting that oil markets resumed their downward trend last week with both Brent and WTI falling over the five days, the report said “Contango structures remain intact in both the Brent and WTI markets”.

“Investors in crude markets remain in evacuation mode,” noted Edward Bell, commodity analyst, Emirates NBD.

He said investors have essentially abandoned long crude positions in the last month and a half.

“WTI net length represents just 3.4 percent of total open interest, its lowest level since August 2016. With so much cash out of the market, the market will be prone to sharp moves off of limited headlines,” the report noted.

Refiners will be looking forward to closing the door on 2018 as margins remain weak, the report added.