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 30 September.
IMAGE: Barrels of oil. Getty Images
Speculators sold over 11,000 lots as of last Tuesday, decreasing net-long positions in Brent futures to around 209,000 lots.
Gross-long positions in Brent decreased by only 754 lots during the week, according to futures and options data from ICE Futures Europe.
The decline in net-long Brent positions reflects weakening expectations for oil demand growth and growing concerns of a potential supply glut in 2025 and 2026, analysts said.
The global oil market is expected to remain heavily oversupplied amid OPEC+ production hikes, as weak demand continues to outweigh the pace of supply returning to the market.
On Sunday, the Saudi Arabia-led oil producers' group agreed to collectively increase supply by 137,000 b/d in November, marking the seventh consecutive month of production hikes.
Commenting on the latest positions data, two analysts from ING Bank noted that the move was “predominantly driven by rising gross shorts positions.”
When speculators reduce their net-long positions, oil prices typically decline. Conversely, when they boost these positions, prices tend to rise, leading to a cycle where their actions can influence oil prices and the market.
By Aparupa Mazumder
Please get in touch with comments or additional info to news@engine.online
