Speculators cut net-long positions in Brent again

Money managers and hedge funds have reduced their net-long bets on ICE Brent futures in the week to 4 August.

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Speculators sold more than 20,000 lots as of 4 August, decreasing net-long positions in Brent futures to over 165,000 lots.

The draw in net-long positions marks the second consecutive weekly decline. Gross-long positions in Brent futures decreased by a little short of 10,000 lots during the week.

The move was driven by fresh shorts entering the market, according to futures and options data from ICE Futures Europe.

The decrease in net-long bets comes amid hopes of a diplomatic breakthrough between Washington and Tehran, ultimately opening the Strait of Hormuz to commercial vessel navigation.

Commenting on the latest data, two analysts from ING Bank said, “speculative sentiment turned more cautious last week.”

Brent crude is currently locked in a precarious balancing act between ongoing assaults on vital energy infrastructure and faint hopes for a peace accord between the US and Iran.

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

By Aparupa Mazumder

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