Oil Extends Losses As 'Short-Squeeze' Ammo Is Now Exhausted

WTI Crude is now down 6% from last week's highs, back below $47 as supply concerns (Abu Dhabi production rise and ConocoPhilips' CEO comments) and OPEC freeze talks doubts have combined with the biggest collapse in speculative short positions in history (following the Saudi statement) - removing the last 'short-squeeze' leg of support from this dead-cat-bounce.

From record short positioning, hedge funds have suffered the biggest squeeze cover in history over the past 2 weeks since Saudi Arabia made a statement hopeful of OPEC freeze talks...

 

Longs have surged though - now near 2-year highs - as shorts covered...

 

With net positioning now exploding to the long side...

h/t @JKempEnergy

But the extreme positioning power driving crude prices appears to have broken as prices fell despite the net increase in longs...

 

As fundamentals perhaps play a role in price action...

And Abu Dhabi is upping production capacity...

Abu Dhabi National Oil Company aims to reach oil production capacity of 3.5m barrels per day by the end of 2018, Reuters reports, citing Salem Al Matroushi, Adnoc manager for exploration and production planning.

 

Says “main challenge is really to sustain the 3.5 million barrels a day for the next 25 years”

 

Says co. has goal to reach recovery rate of over 70%, which has already been reached in “some of our projects”

And ConocoPhilips CEO had some less than exuberant news...

Conocophillips ceo says believes oil market oversupply will extend into 2017

 

Conocophillips ceo says cost cutting in oil industry to continue

And the glut remains...

 

But the real test wil be the next spurious unsourced headline and its reaction by the algos.