Speculators reduce net-long positions in Brent
Money managers and hedge funds have reduced their net-long bets on ICE Brent futures in the week to 9 June.
IMAGE: A crude oil storage facility. Getty Images
Speculators sold about 44,000 lots as of 9 June, decreasing net-long positions in Brent futures to a little short of 209,000 lots.
The move was dominated by fresh shorts entering the market. Gross-long positions in Brent futures also decreased by about 27,000 lots during the week, according to futures and options data from ICE Futures Europe.
The reduction in net-long positions coincided with growing optimism regarding a potential long-term peace agreement between the US and Iran, which is expected to restore commercial navigation through the Strait of Hormuz.
The global oil market has been caught in a tug-of-war between de-escalation efforts and the continued targeting of Middle Eastern energy infrastructure and commercial shipping, resulting in significant volatility in Brent crude futures.
When speculators reduce net-long positions, prices tend to decline. Conversely, when they boost these positions, oil prices typically rise, leading to a cycle where their actions can influence oil prices and the market.
By Aparupa Mazumder
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