After the spike in oil prices in the first days of 2020 on the back of increased tension between the U.S. and Iran, money managers liquidated some of the long positions in WTI Crude in the week to January 14, as the Middle East scare subsided and portfolio managers turned their attention to fundamentals.
According to the weekly reports from exchanges compiled by Reuters columnist John Kemp, money managers sold the equivalent of 64 million barrels of WTI Crude futures, and a total of 99 million barrels worth of the six most closely watched and traded petroleum contracts.
The net long position-the difference between bullish and bearish bets-in Brent Crude remained basically unchanged in the week to January 14, according to Kemp's estimates.
"Looking at the Commitment of Traders report, there was little change in speculative positioning in ICE Brent over the last reporting week. However NYMEX WTI saw significant liquidation, with speculators selling 62,636 lots over the reporting week, to leave them with a net long of 225,794 lots as of the 14th January," ING strategists said on Monday.
At the end of December, money managers had amassed a sizeable bullish position amid expectations that the global economy would rebound this year and drive a rise in global oil demand growth. In the week to December 31, portfolio managers held the most bullish position in oil in nearly 15 months, according to Kemp.
At the start of 2020, oil prices jumped on the U.S. killing of Iran's powerful military leader Qassem Soleimani, and then again on the Iranian retaliation several days later, when Tehran fired missiles at bases in Iraq that host U.S. troops.
Since then, the U.S. and Iran seem to have backed from the brink of war and speculators' attention has returned to how global economic growth and global oil demand growth will fare this year.
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