Speculators reduce net-long positions in Brent

Money managers and hedge funds have cut their net-long bets on ICE Brent futures in the week to 21 October.

IMAGE: Oil pump jacks. Getty Images

Speculators sold over 57,000 lots as of last Tuesday, decreasing net-long positions in Brent futures to a little over 52,500 lots.

Gross-long positions in Brent decreased to a little short of 17,000 lots during the week, according to futures and options data from ICE Futures Europe.

The decline in net-long Brent positions was “driven largely by fresh shorts entering the market,” two analysts from ING Bank noted.

The rise in short positions highlighted market concerns over sluggish oil demand growth and a potential supply glut extending through the end of this year and into 2026, just before Washington 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, “clearly, a large segment of the market was positioned on the wrong side ahead of the US announcement on Russian sanctions. It drove lots of shorts to run in and cover their positions.”

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

By Aparupa Mazumder

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