Investors turned more bearish on oil last week than ever
Investors were more bearish than ever on crude oil last week, deepening a months-long selloff that pressured prices to multi-year lows amid growing concerns of weak demand in top consuming nations.
Negative sentiment swept oil markets so strongly that short positions on Brent crude overtook long positions for the first time, data from the Intercontinental Exchange showed on Friday. Short positions—bets on lower prices—totaled 164,223 contracts, while long positions, or bets on higher prices, amounted to 151,543 contracts, the data showed.
“This historic speculative selling pressure prompted a more than $10/bbl collapse in crude prices between late-August and this past Tuesday,” Commodity Context analyst Rory Johnston wrote.
Investors’ oil outlook has soured as demand growth for the commodity has failed to meet the lofty levels of recent years, pressured by turmoil in top importer China’s economy. Supplies have also overwhelmed markets this year, with U.S. oil producers pumping record amounts of oil.
Brent crude futures closed at $72.75 a barrel on Tuesday, down more than 20% since this year’s peak of more than $90 a barrel. Hedge funds were particularly bearish on diesel as prices approached their lowest levels in three years, TACenergy traders wrote on Monday.
Money managers increased short bets on U.S. ultra-low sulfur diesel futures by more than 12,000 contracts to 65,084 contracts in the week to Sept. 10, data from the Commodity Futures Trading Commission showed.
Published - September 18, 2024 08:01 am IST
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