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 11 November.

IMAGE: Oil storage tanks. Getty Images

Speculators bought a little short of 13,000 lots as of last Tuesday, increasing net-long positions in Brent futures to more than 164,000 lots.

Gross-long positions in Brent increased by about 148 lots during the week, according to futures and options data from ICE Futures Europe.

The surge in net-long Brent positions was “predominantly driven by short covering,” two analysts from ING Bank noted.

This underscores market concerns about tight supply following recent attacks on Russian energy infrastructure and sanctions imposed by the US and the UK on Russian energy exports, which target the country’s two largest oil producers – Rosneft and Lukoil.

Commenting on the latest positions data, ING Bank’s analysts said, “it suggests that some participants are reluctant to be short at the moment amid supply risks related to uncertainty over sanctions.”

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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