Speculators flip back to net-long in Brent

Money managers and hedge funds have shifted back to net-long bets on ICE Brent futures in the week ended 24 September, driven by fresh buying in the global oil market.

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Speculators bought 29,910 lots over the week ended 24 September to leave them with net-long positions in Brent futures of 21,769 lots, according to futures and options data from ICE Futures Europe.

The surge in net-long positions was predominantly driven by fresh buying, according to two analysts from ING Bank, with the gross-long positions in Brent increasing by 21,461 lots.

Speculative trading occurs when money managers and hedge funds invest based on expectations of future price movements. These positions can push Brent’s price higher or lower, creating a cycle where their actions directly influence both the market and oil prices.

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

Commenting on the latest trend, ING Bank’s analysts stated that the latest positioning data “likely reflects consumers taking advantage of lower prices to lock in some hedges.”

By Aparupa Mazumder

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