Speculators reduce net-long positions in Brent

Money managers and hedge funds cut their net-long bets on ICE Brent futures in the week to 15 April, driven by long positions liquidating in the global oil market.

IMAGE: Crude oil barrel and pumpjacks with a downward arrow depicting the sell-off in long positions. Getty Images

Speculators sold about 57,000 lots as of last Tuesday, reducing net-long positions in Brent futures to just under 99,000 lots, according to futures and options data from ICE Futures Europe.

The decline in net-long positions “shows market sentiment is largely negative,” according to two analysts from ING Bank. The gross-long positions in Brent moved about 50,000 lots lower during the week.

Speculative trading occurs when money managers and hedge funds invest based on expectations of future price movements. The slump in buying interest comes amid growing trade tensions between the US and China – two of the largest oil consumers of the world. 

The US-China tariff battle has continued to intensify, after Beijing announced 125% tariff on US goods last week. China's latest tariff announcement follows US President Donald Trump's decision to hike duties on Chinese products to 145%.

Commenting on the latest trend, ING Bank analysts said that this is the smallest position held by speculators since October 2024. “The bulk of the move was driven by longs liquidating,” they added.

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.

“Hedge funds and other major speculators piled on more bearish bets in ICE Brent crude futures in the week to April 15, the latest exchange data showed,” VANDA Insights’ founder and analyst Vandana Hari remarked.

By Aparupa Mazumder

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