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TD Securities warns crude short positions face squeeze risk
TD Securities says persistent oil deficits and Brent clearing key resistance could increase short covering risk among money managers.
TD Securities’ Bart Melek said money managers are positioned heavily short crude, and that the positioning may be vulnerable to a squeeze if the market’s earlier assumptions prove wrong.
In the bank’s view, the bearish setup reflects misread conditions, including pessimism about China demand and expectations for an oil glut, while deficits are expected to persist and deepen through summer.
With Brent breaking a key resistance level, TD Securities expects positioning to shift as the risk of short covering grows.
The FXStreet piece also notes broader context across markets, including a firmer recovery in GBP/USD and EUR/USD alongside a weaker US dollar after June inflation disappointed expectations, plus gold regaining levels above $4,000 per troy ounce.
Latest closeGold $4,011.00 ▼2.3%|WTI crude $78.04 ▲9.3%|Brent $83.15 ▲9.4%