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Oil Trades Near Three-Year High as Hedge Funds Increase Bullish Bets

  • WTI crude declined 0.9 percent after 5 straight days of gains
  • WTI’s relative strength index showing commodity is overbought
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Commonwealth Bank of Australia’s Vivek Dhar weighs in on the price and production of oil.(Source: Bloomberg)
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Oil reversed course as a record crude-buying spree by hedge funds spurred concern that prices may be due for a correction after hitting three-year highs.

Futures in New York slipped 0.9 percent on Tuesday, ending a five-day rally, while prices in London slid to the lowest in a week. Hedge funds last week boosted their bullish bets on crude to record levels, according to the U.S. Commodity Futures Trading Commission and ICE Futures Europe. Now traders are weighing signs crude may be overbought.