Speculators hike net-long positions in Brent

Money managers and hedge funds have increased their net-long bets on ICE Brent futures in the week to 28 October.

IMAGE: Oil storage tanks. Getty Images

Speculators bought a little over 1,19,000 lots as of last Tuesday, increasing net-long positions in Brent futures to more than 1,71,500 lots.

Gross-long positions in Brent increased to a little short of 57,000 lots during the week, according to futures and options data from ICE Futures Europe.

The surge in net-long Brent positions was “driven by a combination of fresh longs entering the market, along with a lot of short covering,” two analysts from ING Bank noted.

The rise in long positions has highlighted market concerns over tight supply after the US and the UK imposed fresh sanctions on Russian energy exports, targeting the country’s two largest oil producers – Rosneft and Lukoil.

Commenting on the latest positions data, ING Bank’s analysts said, “the large shift over the week reflects the announcement of US sanctions on Russia.”

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

By Aparupa Mazumder

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