Speculators increase net-long positions in Brent

Money managers and hedge funds have increased their net-long bets on ICE Brent futures in the week to 29 July.

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Speculators bought almost 34,000 lots as of last Tuesday, increasing net-long positions in Brent futures to more than 261,000 lots, according to futures and options data from ICE Futures Europe.

The increase in net-long positions was driven “fairly evenly by fresh buying, along with short covering,” according to two market analysts from ING Bank. The gross-long positions in Brent gained by a little over 16,000 lots during the week.

Front-month Brent has gained some support in recent days amid escalation of trade tensions between the US and its major trade partners – India and China.

Last week, the US administration led by Donald Trump threatened to impose 25% tariff and additional penalties on India for purchasing Russian crude.

“Concerns over the US imposing secondary tariffs on countries that import Russian oil have speculators becoming more constructive towards the market,” ING Bank’s analysts said.

While the Trump administration has so far threatened penalties against India, it has remained relatively quiet on the continued flow of Russian oil to China.

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 oil prices and the market.

By Aparupa Mazumder

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