Speculators increase net-long positions in Brent

Money managers and hedge funds have increased their net-long bets on ICE Brent futures in the week to 15 July.

IMAGE: Oil pump jacks. Getty Images

Speculators bought a little over 16,000 lots as of last Tuesday, increasing net-long positions in Brent futures to more than 238,000 lots, according to futures and options data from ICE Futures Europe.

The increase in net-long positions was “predominantly driven by fresh buying,” according to two market analysts from ING Bank. The gross-long positions in Brent gained by over 15,000 lots during the week.

Front-month Brent has gained some support in recent days amid recent escalation of geopolitical tensions risks in the oil-rich Middle Eastern region and fresh EU sanctions on Russian energy.

Last week, the European Union (EU) adopted the 18th package of economic sanctions against Russia, aimed at limiting oil revenues flowing to fuel its aggression against Ukraine.

The EU has targeted 105 vessels that are allegedly a part of the Russia's shadow fleet used to circumvent the price caps set on Russian crude and oil products. It has also lowered the oil price cap for Russian crude from $60/bbl to $47.60/bbl.

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

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