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Two trades on oil you could make today

Despite the odd bounce, the momentum in crude oil, notably Brent, is negative. Brent crude net-longs are at a two-year low; in fact, Brent has seen its net-long cut by 70% while WTI crude longs were cut by 38% in the past seven weeks.

Saxo Bank's Head of Commodity Strategy, Ole Hansen, says the bigger the short becomes, the bigger the risk of going further short because you're "not alone in that club anymore" and there are a lot of people looking over their shoulder for any possible positive price news. He says trading in the market is nervous and it makes sense to be short. But you must be very firm about where you have your stop levels and make sure the market "doesn't run away from you".

Ole explains just what's going on in the market and why Brent has fallen faster the WTI. Traders also must consider what action OPEC might take should Brent fall to USD 100 / barrel and the impact of more oil production from Libya.

02:24 minutes
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