Speculators hike net-long positions in Brent

Money managers and hedge funds have increased their net-long bets on ICE Brent futures in the week to 13 January.

IMAGE: Oil storage tanks. Getty Images

Speculators bought over 85,000 lots as of last Tuesday, increasing net-long positions in Brent futures to a little over of 200,000 lots.

Gross-long positions in Brent increased by more than 50,000 lots during the week, according to futures and options data from ICE Futures Europe.

“This is the largest position held since September,” two analysts from ING Bank said.

The move underscores market concerns about geopolitical risks in Iran, as protests intensify across the OPEC member state, with demonstrators demanding a regime change.

Market analysts fear that any US intervention could threaten oil supply flows from the Middle East. Iran is the fourth-largest OPEC member, producing around 3.2 million b/d of crude oil.

Commenting on the latest positions data, ING Bank’s analysts said, “this move was predominantly driven by fresh buying amid growing supply concerns from Iran, given the recent protests in the country and the potential for US intervention.”

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

By Aparupa Mazumder

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