The oil markets were slow to react to obviously bullish catalysts such as supply cuts, falling inventories and growing demand when they first kicked in about three months ago. Indeed, it appeared that the bears were about to overrun the markets, with bearish positioning in the oil futures markets recently sinking to the extremes they last did during the 2009 financial crisis.
However, just as Saudi Energy Minister Abdulaziz bin Salman had warned speculators of an impending short squeeze, the oil markets have turned around and the ongoing rally has gathered serious momentum: Front-month Brent has rallied by more than $14 per barrel since sinking to a 3-month low of $71.57/bbl on 28 June. September Brent has climbed to $85.80/bbl, the highest level since April 17. The settlement price and intra-day high have moved higher in 17 days of the last 24 trading days while the intra-day low has risen on 18 days.
Union Jack Oil plc (LON:UJO) is an onshore oil and gas exploration company with a focus on drilling, development and investment opportunities in the United Kingdom hydrocarbon sector.
