Speculators reduce net-long positions in Brent

Money managers and hedge funds have decreased their net-long bets on ICE Brent futures in the week to 6 January.

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Speculators sold a little over 3,000 lots as of last Tuesday, cutting net-long positions in Brent futures to a little short of 123,000 lots.

Gross-long positions in Brent increased by about 7,000 lots during the week, according to futures and options data from ICE Futures Europe.

The move underscores market concerns about geopolitical risks in Venezuela, following Washington’s latest operation in Caracas that led to the detention of Venezuela’s President Nicolas Maduro and his wife.

Commenting on the latest positions data, ING Bank’s analysts said, “the market saw an increase in both gross long and gross short, highlighting uncertainty about the implications of events in Venezuela.”

Last month, US President Donald Trump ordered a “complete and total” blockade of sanctioned oil tankers moving in and out of Venezuela.

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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