Money managers and hedge funds have increased their net-long bets on ICE Brent futures in the week to 14 July.
IMAGE: Oil storage tanks. Getty Images
Speculators bought over 114,000 lots as of 14 July, increasing net-long positions in Brent futures to over 169,000 lots.
The surge in net-long positions has broken a streak of eight consecutive weeks of reductions. Gross-long positions in Brent futures increased to a little short of 76,000 lots during the week.
The increase comes amid renewed hostilities between the US and Iran, disrupting some vessel traffic through the Strait of Hormuz.
“The move was driven predominantly by fresh longs entering the market,” two analysts from ING Bank noted.
Currently, the escalating attacks on vital energy infrastructure and commercial vessels is locked in a fierce tug-of-war with lingering hopes for a US-Iran diplomatic breakthrough, leaving Brent futures caught in the middle.
Commenting on the latest positions, ING Bank’s analysts said, “given the market moves in recent weeks, it’s unsurprising to see speculators increase their net long in ICE Brent.”
When speculators boost net-long positions, prices tend to rise. Conversely, when they reduce these 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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