Portfolio managers have further increased their long positions in most traded petroleum contracts, with a bullish bet that focused almost entirely on the US benchmark WTI Crude, writes columnist John Kemp of Reuters in an analysis of the latest exchange data.
In the week to February 9, hedge funds and other money managers bought the equivalent of 33 million barrels in the six most traded oil futures and options contracts. Purchases were mostly concentrated on WTI Crude, where the long position increased in the week to February 9 by the equivalent of 30 million barrels, suggesting that hedge funds expected the price of US oil to rise because of an Arctic explosion expected to stretch. like Texas, says Kemp.
The long positions in petroleum contracts have now increased for 14 consecutive weeks, which according to Kemp is the longest and largest increase in strong bets on oil since early 2019.
Expectations of higher WTI crude prices materialized this week, and WTI crude prices rose more than $ 60 a barrel for the first time in more than 13 months on Monday. The last time WTI Crude traded above $ 60 was in early January 2020, before the pandemic began to worry traders and fund managers.
In the week to February 9, the extreme positions were seen above or near one-year highs in various products from crude oil and products to copper and maize, Ole Hansen, head of commodity strategy at Saxo Bank, said on Monday, commenting on the commitments. . of dealer report.
The report showed that the combined net long position in Brent and WTI – the difference between a clumsy and a clumsy bet – rose sharply to a peak of 28 months at 727,500.
It is still 33 percent below the record of 1.1 million lots as of March 2018, says Hansen of Saxo Bank.
“While short-term momentum indicators began to consolidate last week, long-term ratios remain low, an indication that speculative length still has room to grow before trading starts to look tight,” he added.
By Tsvetana Paraskova for Oilprice.com
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