Gasoline prices in the United…
OPEC+ agreed on Wednesday morning…
Money managers continued to take profits in petroleum futures last week, after oil prices sharply pulled back in the second half of March, halting the nearly three-month-long gradual rise in oil prices.
According to data from exchanges compiled by Reuters columnist John Kemp, hedge funds and other portfolio managers changed little their overall position in the six most-traded oil-linked futures and options contracts, and were small buyers of a net equivalent of 10 million barrels in those contracts.
Brent and WTI contracts saw some light buying in the week to March 30, but most of those position changes were likely due to the profit-taking from the previous reporting week to March 23, when heavy sell-offs in oil dominated the market.
Hedge funds continue to be more bullish than bearish on oil, with long positions outnumbering shorts in a five-to-one ratio, Kemp noted.
Yet, money managers have cut their overall net long in oil in recent weeks amid renewed concerns about demand recovery and the sentiment from many market participants that oil prices were already going ahead of themselves when Brent Crude hit $70 a barrel in early March.
In the second half of March, oil crashed by 9 percent one day for the biggest drop since April 2020, when the U.S. oil benchmark dipped into negative territory. Less than a week later, prices also crashed, weighed down by concerns about immediate demand and speculators liquidating long positions.
In the previous reporting week to March 23, hedge funds heavily sold oil contracts—at the fastest pace in six months.
In the latest reporting week to March 30, the biggest reduction in bullish bets among all commodities came in crude oil, Ole Hansen, Head of Commodity Strategy at Saxo Bank, said on Tuesday, commenting on the latest Commitments of Traders report.
“Despite rallying 5% on the week, the biggest reduction hit crude oil with the net long in Brent falling to a four-month low,” Hansen noted. Overall, the combined net long in WTI and Brent dropped to an 11-week low, he added.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com