Speculators reduce net-long positions in Brent

Money managers and hedge funds have reduced their net-long bets on ICE Brent futures in the week to 12 August.

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Speculators sold a little over 34,000 lots as of last Tuesday, decreasing net-long positions in Brent futures to about 200,000 lots, according to futures and options data from ICE Futures Europe.

The decline in net-long positions comes as looming risks of global sanctions on Russian oil and secondary tariffs targeting its buyers seem to somewhat ease, according to market analysts.

“This was predominantly driven by fresh shorts entering the market,” according to two analysts from ING Bank. The gross-long positions in Brent fell by more than 10,000 lots during the week.

Front-month ICE Brent contract has lost momentum in recent days as market analysts shifted focus on a potential US-brokered ceasefire deal between Russia and Ukraine.

Oil prices have also come under pressure due to concerns over a supply glut as OPEC+ output rises.

Commenting on the latest trend, the two ING Bank analysts said that “speculators are already focusing on the bearish outlook for the market.”

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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