Speculators add net-long positions in Brent

Money managers and hedge funds have increased their net-long bets on ICE Brent futures in the week to 21 July.

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Speculators bought a little over 22,000 lots as of 21 July, increasing net-long positions in Brent futures to more than 192,000 lots.

The surge in net-long positions marks the second consecutive week of gains. However, gross-long positions in Brent futures decreased by over 3,000 lots during the week.

“This move was exclusively driven by shorts covering, rather than fresh buying entering the market,” two analysts from ING Bank noted.

The increase in net-long bets came as the US and Iran engaged in major fire exchange last week, disrupting some vessel traffic through the Strait of Hormuz.

Brent crude’s price is currently trapped in a high-stakes standoff, caught between relentless attacks on critical energy assets and lingering optimism over potential US-Iran diplomacy.

“The latest positioning data, which comes with a lag, unsurprisingly shows that speculators continued to add to their net long over the last reporting week," ING Bank’s analysts said.

When speculators boost net-long positions, prices tend to rise. Conversely, when they reduce these positions, oil prices typically decline, leading to a cycle where their actions can influence oil prices and the market.

By Aparupa Mazumder

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