Speculators increase net-long positions in Brent

Money managers and hedge funds have hiked their net-long bets on ICE Brent futures in the week to 27 October.

IMAGE: Getty Images

Speculators bought over 3,500 lots as of 27 October, increasing net-long positions in Brent futures, to more than 245,000 lots. The latest net-long Brent positions mark the second consecutive week of gains.

Gross-long positions in Brent futures increased by a little over 3,000 lots during the week.

The surge in net-long positions was driven largely by an increase in gross-long positions, according to futures and options data from ICE Futures Europe.

“The net speculative long is still some distance away from the year-to-date high of around 430k [430,000] lots seen in March,” two analysts from ING Bank noted.

Market participants have hiked net-long bets as supply-related risks from the Middle East continue to grow, according to market analysts.

“This suggests that with the right catalyst, speculators could add to this position,” ING Bank’s analysts added.

Notably, Brent crude’s price remains elevated amid incessant attacks on critical energy infrastructure, while commercial navigation through the Strait of Hormuz remains choked.

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

By Aparupa Mazumder

Please get in touch with comments or additional info to news@engine.online