Speculators reduce net-long positions in Brent

Money managers and hedge funds have reduced net-long bets on ICE Brent futures in the week ended 22 October, as speculators remain caught between escalating geopolitical tensions and a bearish demand outlook.

PHOTO: A black oil barrel. Getty Images

Speculators sold 1,941 lots over the week ended 22 October to leave them with net-long positions in Brent futures of 134,581 lots, according to futures and options data from ICE Futures Europe.

The decline in net-long positions was predominantly driven by mixed market moving factors, according to two analysts from ING Bank.

Despite growing concerns about supply disruptions in the Middle East, weak oil demand growth forecasts, and “comfortable inventory levels” have continued to put downward pressure on oil prices. These conditions have contributed to a reduction in net-long positions in Brent, the analysts noted.

Speculative trading occurs when money managers and hedge funds invest based on expectations of future price movements. These positions can push Brent’s price higher or lower, creating a cycle where their actions directly influence both the market and oil prices.

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 the market and oil prices.

“The lack of movement shows that speculators have been torn between growing geopolitical risks and bearish 2025 fundamentals,” ING Bank’s analysts stated commenting on the latest trend.

By Aparupa Mazumder

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