Hedge Funds Extend Bullish Stance in Brent Oil From 5-Year Peakby
Traders' net-long position highest since at least early 2011
Long positions rise three times as much as shorts reduced
Hedge funds and other speculators extended their bullish stance in Brent crude from the highest in five years as the oil benchmark climbs toward $40 a barrel.
Money managers boosted their long positions in Brent by 16,417 contracts, or about three times as much as they cut short positions, in the week to March 1, according to data from ICE Futures Europe. That increased their net-long position by 22,171 contracts to 342,460, the highest in data the exchange began compiling in early 2011.
Brent futures rallied by 10 percent last week as key OPEC members such as Saudi Arabia prepared to conclude an agreement with Russia and other producers on freezing oil production in a bid to tackle the global oversupply.
Traders’ positions in the U.S. benchmark, West Texas Intermediate, showed a similar trend for the period as drillers idled more rigs and the nation’s crude production declined further. Speculators reduced their short positions in West Texas Intermediate crude by 15 percent in the week ended March 1, according to U.S. Commodity Futures Trading Commission data.
“The market crowd lost its interest in the supply glut, although oil inventories continued to build in recent weeks, and instead focused on the early signs of declining U.S. oil production,” Norbert Ruecker, head of commodity research at Julius Baer Group Ltd., said in an e-mailed note.