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 28 July.

IMAGE: An oil pumpjack. Getty Images

Speculators sold a little short of 7,000 lots as of 28 July, decreasing net-long positions in Brent futures to about 185,000 lots.

The decline in net-long positions comes following two consecutive weeks of gains. Gross-long positions in Brent futures decreased by over 3,000 lots during the week.

The move was driven by fresh shorts entering the market, according to futures and options data from ICE Futures Europe.

The decrease in net-long bets comes after US President Donald Trump called off a planned round of military strikes on Iran, fuelling hopes of a diplomatic breakthrough.

Brent crude is currently locked in a precarious balancing act between ongoing assaults on vital energy infrastructure and faint hopes for a diplomatic breakthrough between Washington and Tehran.

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

By Aparupa Mazumder

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