Hedge Funds on Hold in Run Up to OPEC Meeting: Kemp
Hedge funds left their positions largely unchanged in the run up to last week's meetings among oil ministers from the Organization of the Petroleum Exporting Countries and its allies.
Hedge funds and other money managers trimmed their combined net long position in the six most important futures and options contracts linked to petroleum for the ninth week in a row.
But the combined net long position was cut by just 14 million barrels in the week to June 19, the smallest weekly amount since the middle of April, taking the total reduction so far to 330 million barrels since April 17.
There were only very minor changes to positions in all crude and fuels contracts.
Portfolio managers cut net positions in NYMEX and ICE WTI (-9 million barrels), U.S. heating oil (-1 million) and European gasoil (-8 million) but added positions in Brent (+3 million) and U.S. gasoline (+2 million).
In most cases, position changes were driven mainly by small reductions in existing bullish long positions rather than the creation of new bearish short ones (https://tmsnrt.rs/2tt9dX9).
Even after the long liquidation over the last nine weeks, fund managers remain overwhelmingly bullish about the outlook for oil prices later in 2018.
Bullish long positions outnumber bearish short positions by a ratio of more than 7:1, down from a peak of almost 14:1 in mid-April, but still exceptionally high.
Hedge fund managers have become slightly less bullish about the outlook for oil prices rather than outright bearish.
Short positions remain at unusually low levels in all petroleum contracts and there has been no sign of significant new short selling.
By John Kemp
