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 2 September.
IMAGE: Oil storage tanks. Getty Images
Speculators bought over 44,000 lots as of last Tuesday, increasing net-long positions in Brent futures to more than 251,000 lots, according to futures and options data from ICE Futures Europe.
The rise in net-long Brent positions comes amid escalating geopolitical risks and supply concerns, especially with analysts speculating tighter sanctions on Russian crude oil exports.
The move was “predominantly driven by fresh buying,” according to two analysts from ING Bank. The gross-long positions in Brent gained by over 31,000 lots during the week.
Front-month ICE Brent contract has gained some momentum in recent days amid diminishing hopes for a ceasefire deal between Russia and Ukraine, as both countries continue cross-border shelling.
US President Donald Trump recently said that Washington is prepared to move to a “second phase” of sanctions on Russia, Reuters reported. Meanwhile, the European Union is reportedly exploring new sanctions on Russian banks and energy companies, according to Bloomberg.
Commenting on the latest positions data, ING Bank’s analysts noted that, “money managers boosted bullish bets on crude oil amid tightness in the US market and geopolitical risks.”
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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