Oil markets opened stronger on Tuesday, continuing a rally that has seen Brent crude futures soar 8 percent since mid-January, yet analysts are increasingly saying that price rises have been overblown and are due a downward correction. Benchmark Brent crude futures LCOc1 were trading at $61.65 per barrel at 0130 GMT, up 25 cents since their last settlement. U.S. WTI crude was up 10 cents at $52.88 a barrel.
“The market is getting increasingly dubious as to this rally, with the CFTC showing that non-commercial net long positions are starting to fall,” ANZ bank said in a morning note on Tuesday. Analysts also said that downward pressure may come from the refined products market in the next quarter.
“Consensus expects large inventory builds and pricing pressure for oil markets in 2015,” Morgan Stanley said on Monday. Demand for refined oil products has been strong in Asia,, which is structurally short, and producers have been taking advantage of low crude prices to cover themselves with fuel and build up product inventories.