Speculators cut net-long positions in Brent

Money managers and hedge funds have reduced their net-long bets on ICE Brent futures in the week to 22 September.

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Speculators sold a little more than 64,500 lots as of 22 September, decreasing net-long positions in Brent futures to over 218,000 lots.

The decline in net-long positions comes after two consecutive weeks of rise. Gross-long positions in Brent futures decreased by more than 43,000 lots during the week.

The slump in net-long positions was driven largely by fresh shorts entering the market, according to futures and options data from ICE Futures Europe.

Market participants slashed net-long bets as hopes of a diplomatic breakthrough between Washington and Tehran found some support last week during the United Nations General Assembly (UNGA) summit.

Meanwhile, Brent crude’s price has remained elevated amid incessant attacks on critical energy infrastructure, while commercial navigation through the Strait of Hormuz remains choked.

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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