Money managers continued to liquidate long positions in oil futures as the coronavirus outbreak batters oil demand, but the pace of selling slowed down again last week, for a third consecutive week.
According to exchanges data compiled by Reuters market analyst John Kemp, portfolio managers sold the equivalent of 16 million barrels in the six most important and most traded petroleum futures in the week to February 18.
Although last week was another week in which the net long position in petroleum futures dropped, hedge funds sold the fewest number of barrel equivalents for the past month since the coronavirus outbreak made headlines and started seriously affecting market sentiment over concerns about global oil demand.
In the week to February 18, money managers were net sellers of 28 million barrels of WTI Crude and 1 million barrels of Brent Crude, according to the data compiled by Kemp.
The previous week to February 11 had already shown signs that although liquidation of longs continued, the pace of rising shorts slowed after the early market panic. In the week to February 11, money managers sold the equivalent of 74 million barrels in the six most important petroleum contracts.
In the week to February 18, hedge funds and other money managers were net sellers of 16 million barrels of those contracts, according to the exchanges data crunched by Kemp.
"Funds cut bullish WTI crude oil bets by 27k lots while keeping the Brent long close to unchanged. The latter potentially in response to supply risks from Libya, Russia's Rosneft and potential OPEC+ cuts," Ole Hansen, Head of Commodity Strategy at Saxo Bank, said on Monday, commenting on the commitment of traders (COT) reports.
However, after the latest COT report with data until February 18, the market started panicking about an extended shock to global economic activity and oil demand as the coronavirus cases and deaths spread outside China, to South Korea, Japan, Iran, and Italy.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More