Speculators hike net-long positions in Brent

Money managers and hedge funds increased their net-long bets on ICE Brent futures in the week to 17 June.

IMAGE: Oil barrels. Getty Images

Speculators bought a little over 76,000 lots as of last Tuesday, increasing net-long positions in Brent futures to more than 270,000 lots, according to futures and options data from ICE Futures Europe.

The increase in net-long positions was driven by fresh longs entering the global oil market, following Israel’s attack on Iranian nuclear facilities on 13 June, according to market analysts. The gross-long positions in Brent gained by nearly 36,000 lots during the week.

The growth in buying interest came “even before the United States bombed the country’s nuclear installations overnight on June 21/22,” independent oil market analyst John Kemp said.

“Brent positions had almost tripled from just 98 million barrels [lots] (15th percentile) six weeks earlier shortly after the beginning of May,” Kemp said.

Front-month Brent has gained some upward momentum in recent days on the back of missile attacks between Israel and Iran.

Safety concerns around critical oil transit chokepoints in the region, including the Strait of Hormuz, Suez Canal, Gulf of Aden and the Bab al-Mandab Strait, have also supported oil prices.

The US military has joined the conflict over the weekend, striking Iran’s nuclear facilities in Natanz, Fordo and Isfahan. Tehran’s government has promised to retaliate. The country’s parliament has called for the Strait of Hormuz to be shut, according to media reports.

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

Please get in touch with comments or additional info to news@engine.online