Hedge Funds Boost ICE Brent Crude Net-Longs to Six-Week High

Hedge funds and other money managers raised bullish bets on Brent crude to their highest level in six weeks, according to data from ICE Futures Europe.

Speculative bets that prices will rise, in futures and options combined, outnumbered short positions by 130,219 lots in the week ended May 14, the London-based exchange said today in its weekly Commitment of Traders report. The gain of 6,184 contracts, or 5 percent, is a third straight weekly increase and brings net-long positions to the highest since April 2.

Bearish positions by producers, merchants, processors and users of Brent outnumbered bullish positions by 348,081, down by 3,083, or 0.9 percent, from their highest since January 2011, the starting point for the data.

Brent crude dropped 1.7 percent to $102.60 a barrel in the week to May 14 on the ICE exchange, and traded for $104.21 a barrel as of 12:20 p.m. London time.

Swaps dealers were net-long 260,686 lots, down 4,565, or 1.7 percent from a week earlier, the first decrease in 13 weeks.

Money managers’ net-short bets on European gasoil increased by 5,041 contracts, or 51 percent, to 14,974. This was the third week in which there were more shorts than longs since the data was first published in January 2011.

ICE publishes, usually each Monday, aggregate numbers for long and short positions for speculators such as hedge funds and institutional investors, as well as commercial companies that buy or sell futures to protect against price moves. Analysts and investors follow changes in speculators’ positions because such transactions can reflect an expectation of a change in prices.

To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net

To contact the editor responsible for this story: Stephen Voss on sev@bloomberg.net

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