Speculators cut net-long positions in Brent

Money managers and hedge funds have decreased their net-long bets on ICE Brent futures in the week to 5 August.

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Speculators sold a little over 20,000 lots as of last Tuesday, decreasing net-long positions in Brent futures to about 241,000 lots, according to futures and options data from ICE Futures Europe.

The decline in net-long positions comes despite looming risks of global sanctions on Russian oil and secondary tariffs targeting its buyers, according to market analysts.

“This was a move predominantly driven by longs liquidating,” according to two analysts from ING Bank. The gross-long positions in Brent fell by almost 18,000 lots during the week.

Front-month ICE Brent contract has lost some momentum in recent days amid escalating trade tensions between the US and its key trade partners such as India, which now faces a 50% tariff on all exports to the US.

Oil prices have also come under pressure due to concerns over a supply glut as OPEC+ output rises.

Commenting on the latest trend, the two ING Bank analysts said that “the latest positioning data shows that speculators are bearish towards the oil market.”

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

By Aparupa Mazumder

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