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 7 April.

IMAGE: Oil storage tanks. Getty Images

Speculators sold a little over 5,000 lots as of last Tuesday, decreasing net-long positions in Brent futures to about 424,000 lots.

Gross-long positions in Brent futures declined by about 4,000 lots during the week, according to futures and options data from ICE Futures Europe.

“Positioning data points to growing uncertainty [in the Middle East],” two analysts from ING Bank noted. Oil flows from the region have curtailed due to forced output cuts by several Arab producers.

While the latest decline in net-long bets can be attributed to market expectations of a ceasefire deal between the US and Iran, persistent risks surrounding Middle East conflict remain a key driver of speculative activity, according to analysts.

Commenting on the latest data, ING Bank’s analysts noted the decline in net-long positions was “driven by a 4,525‑lot fall in gross longs.”

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

By Aparupa Mazumder

Please get in touch with comments or additional info to news@engine.online