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Oil demand is about to fall off a cliff, and just at the time when oil production is sinking so low it’s draining supplies.
Americans tend to use less gasoline in August and September as vacationers head home, but this year energy investors are worried the seasonal decline in demand is going to push prices down lower than normal, Bloomberg reports.
"People are looking ahead to the fall and are worried," says Strategic Energy & Economic Research president Michael Lynch. “There’s more and more talk of prices going south of $40 and as a result people are going short.”
The numbers back up those fears. Money managers are betting more than they have in a year that West Texas Intermediate crude prices are set to fall, pushing their net position to its lowest point since March at $44.65 a barrel. [Bloomberg]
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