Speculators hike net-long positions in Brent

Money managers and hedge funds added to their net-long bets on ICE Brent futures in the week to 1 April, driven by fresh buying in the global oil market.

PHOTO: Oil barrels. Getty Images

Speculators bought around 56,000 lots as of last Tuesday to leave them with net-long positions in Brent futures of about 300,000 lots, according to futures and options data from ICE Futures Europe.

“This move was driven by fresh longs entering the market,” according to two analysts from ING Bank. The gross-long positions in Brent gained by about 62,000 lots during the week.

Speculative trading occurs when money managers and hedge funds invest based on expectations of future price movements. The increase in buying came right before the onset of US tariffs.

Commenting on the latest trend, ING Bank analysts said that the “speculators increased their net long ahead of the tariff announcement on 2 April.”

However, the focus has now shifted to a potential global trade war, which could dent demand for commodities and drive prices lower.

Last week, President Donald Trump-led US administration announced that a minimum 10% reciprocal tariff will be imposed on all countries exporting goods to the US from 5 April, in response to the tariffs those nations already impose on American exports.

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.

By Aparupa Mazumder

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