Speculators ramp up net-long positions in Brent

Money managers and hedge funds increased their net-long bets on ICE Brent futures in the week to 14 January, driven by fresh buying in the global oil market.

PHOTO: Oil pump jacks during dusk. Getty Images

Speculators bought about 27,000 lots as of last Tuesday to leave them with net-long positions in Brent futures of 254,000 lots, according to futures and options data from ICE Futures Europe.

The surge in net-long positions was predominantly driven by fresh long positions entering the market, according to two analysts from ING Bank, leaving speculators with their largest net long positions since May 2024.

Speculative trading occurs when money managers and hedge funds invest based on expectations of future price movements.

The gross-long positions in Brent increased by 34,000 lots during the week. The surge in buying came amid growing supply-related concerns from Russia, following stricter US sanctions against the country’s energy sector.  

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 the market and oil prices.

Commenting on the latest trend, ING Bank analysts said that the “strong buying reflects supply concerns following the announcement of US sanctions against the Russian energy industry.”

By Aparupa Mazumder

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