With crude oil prices reaching multi-year highs, portfolio managers have decreased their bullish bets in the most recent reporting week in order to collect profits.
According to statistics from futures exchanges quoted by Reuters’ market analyst John Kemp, hedge funds sold the equivalent of 16 million barrels of petroleum-related contracts in the week ending October 12.
Money managers took profits in the week ending October 12 after building up a large net long position (the difference between bullish and bearish bets) over the previous eight weeks. They reduced their net long positions, particularly in Brent Crude, which has been trading above $80 since the beginning of October. in particular.
However, long holdings in WTI Crude futures increased for the third week in a row.
The benchmark price in the United States hit $80 per barrel on October 12th.
According to Ole Hansen, Head of Commodity Strategy at Saxo Bank, selling in Brent was a major factor in investors cutting their bullish commodity bets by 4 percent to 2 million lots last week.
ING strategists Warren Patterson and Wenyu Yao commented on the latest Commitment of Traders (COT) reports on Monday, saying that “the latest positioning data shows that money managers increased their net long positions in NYMEX WTI by another 10,448 lots over the last reporting week to 326,605 lots, 3rd consecutive week of longs build-up.”
“In contrast, ICE Brent speculative activity was subdued, and managed money net longs fell by 31,756 lots during the most recent reporting week, with the decline mostly driven by longs liquidation.
On profit booking at higher prices, managed money gross longs fell by 31,018 lots last week, according to the strategists.
WTI Crude traded at over $83 a barrel on October 18 and Brent Crude at over $85 on October 19, as the global energy crisis continues to brighten the outlook for oil products to replace record-priced natural gas and coal.