Speculators cut net-long positions in Brent

Money managers and hedge funds have decreased their net-long bets on ICE Brent futures, in the week to 17 February.

IMAGE: Flags of the US and Iran. Getty Images

Speculators sold more than 17,800 lots as of last Tuesday, decreasing net-long positions in Brent futures to a little over 263,000 lots.

Gross-long positions in Brent decreased by around 11,000 lots during the week, according to futures and options data from ICE Futures Europe.

“The move was predominantly driven by longs liquidating,” two analysts from ING Bank noted.

Although geopolitical risks surrounding US-Iran conflict have somewhat eased after last week’s second round of US nuclear talks, they remain a key driver of speculative activity, according to market analysts.

Representatives from both countries are scheduled to meet again on Thursday, to hold a third round of negotiations. Notably, Iran is the fourth-largest OPEC member, producing around 3.2 million b/d of crude oil.

Commenting on the latest data, the two ING analysts said, “the ongoing geopolitical uncertainty and resulting supply risks have kept speculative interest in the oil market fairly elevated so far this year.”

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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