After long stormy growth, oil prices have entered a stage of correction, and investors EN masse out of long positions.
Only in the last week of the largest U.S. ETF that invests in oil, brought $348 million, barely failed to reach the record of December 2013, when it was withdrawn $354 million
Well, for the last two weeks outflow of funds exceeded $400 million.
From their January lows, oil prices have increased by about 50%, and now the bears again take the initiative: the number of positions aimed at increasing, decreasing, and falling – rising.
Over the last few weeks, experts have repeatedly noted that the rise in oil prices due to large-scale closing of short positions, but since the majority of “bears” during this time the market has endured, now we need them back again, and then repeat this trick.
In the meantime, oil prices are falling are not very willing. If in the course of trading on Tuesday, the price of WTI reached $36, at closing, she went up almost to $37.
Due primarily to supply data from the American petroleum Institute (API). The growth of oil reserves was continued, the truth was more modest forecasts. Instead of the expected 3.2 million barrels the increase amounted to 1.5 million barrels. Rose and stocks in Cushing, and the seventh consecutive week, this time at 471 thousand barrels.
However, because these statistics react mainly algorithmic traders, or more simply, robots, we saw the growth of quotations.
Actually, these are all local manifestations, and much more important events will take place today. First, the oil market will react to fresh data on reserves and production from the U.S. Department of energy. If we see growth in production volumes, we can assume that this market will react very violently. On the other hand, tonight will be announced the results of the fed meeting, and with the projections and press conference, so volatility will likely be rolls.
Just last week we became witnesses of how on the ECB decision, the EUR/USD pair showed one of the strongest intraday movements over the last 12 years.
Escape from Europe
Investors are fleeing from European equities. Over the last five weeks they withdrew $1.6 billion from ETF MSCI Eurozone. However, the outflow of funds is gaining momentum along with the fact that stocks in the region hit bottom in mid-February.
Skepticism may persist until December, because even the prospect of increased stimulus after European Central Bank meeting last week practically did not help to reduce the risks, and reassured investors from the US, not wanting to go back to the regional market.
“The markets are out of control on the background of distrust in the ability of Central banks to avoid recession. However, if the fed says, what can we expect next rate hike, this is the last thing we need in order to return,” said analyst at AB SEB Thomas Thygesen.
The reaction last week to increase the incentives from the ECB turned out to be pretty hectic. The outflow of shares from the stock exchange iShares Fund is only part of the picture. From European funds managers withdrew $3.3 billion of direct investments in the week ended March 9, extracting money for the fifth week in a row, what was the worst capital flight since October of 2014, according to Bank Of America.
