• WTI is starting the week off on the backfoot as the US dollar firms. 
• Investors continue to reduce their bullish bets.

The price of WTI is lower at the start of the week, losing some 0.82% at the time of writing after falling from a high of $105.02 to a low of $103.54 so far. There is a public holiday in parts of Southeast Asia so volumes are out but there have been moves in markets nonetheless, filtering their way through to the black gold. 

Oil finished the start of a new month and quarter on Friday lower due to recessionary fears that have weighed on risk apatite, supporting the greenback.

''Investors continue to reduce their bullish bets as restrictive monetary policy raises the risk of slower economic growth,'' analysts at ANZ Bank said, noting that net long positions in WTI crude futures at now at their lowest level since March 2020, when demand collapsed amid the initial outbreak of COVID-19.

''This is despite ongoing signs of tightness. The US crude prompt time spread (spot - 1m future), an indication of supply and demand balances has surged to USD4/bbl, its highest level since March. Saudi Arabia also raised its selling prices of light crude to most regions for August amid strong demand,'' the analysts explained.

''US exports also remain strong, with the four-week average sitting above 3mb/d. Further supply disruptions are also hanging over the market. G7 members are discussing further sanctions, which could include a plan to cap Russia’s oil revenue. This has sparked a rebuke from Russia, with President Putin warning it would be a catastrophe for global energy markets.''

Russia is the wild car for oil

Meanwhile, plans by the West to cap Russian oil prices are the wild card in the oil market. President Vladimir Putin has warned that further sanctions could lead to "catastrophic" consequences.

“Further use of sanctions may lead to even more severe — without exaggeration, even catastrophic — consequences on the global energy market," Putin explained at a televised meeting with senior officials. "I see certain colleagues [thinking]... we do not give a damn about those sanctions, to hell with them,” he added, urging caution from the Russian side as well. “Yes, we must feel confident, but we must recognize the risks, too."