Speculators cut net-long positions in Brent
Money managers and hedge funds have reduced their net-long bets on ICE Brent futures in the week to 23 June.
IMAGE: Oil storage tanks. Getty Images
Speculators sold more than 23,000 lots as of 23 June, decreasing net-long positions in Brent futures to a little over 90,000 lots.
The decline in net-long positions marks the sixth consecutive week of reductions. The move comes amid a temporary 60-day peace deal between the US and Iran, which is expected to restore vessel movement through the Strait of Hormuz.
“Since the temporary peace deal, we have seen a sizeable amount of fresh selling coming into the oil market,” ING Bank’s head of commodities strategy Warren Patterson noted.
Gross-long positions in Brent futures decreased by over 52,000 lots during the week, according to futures and options data from ICE Futures Europe.
The global oil market remains locked in a volatile crossfire, with Brent crude futures swinging between optimism over diplomatic de-escalation and the stark reality of continued strikes on energy infrastructure and commercial shipping.
Commenting on the latest data, Patterson said, “the speculative gross short in ICE Brent is near record highs.”
When speculators reduce net-long positions, prices tend to decline. Conversely, when they boost these positions, oil prices typically rise, leading to a cycle where their actions can influence oil prices and the market.
By Aparupa Mazumder
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