Big money oil investors are calling a bottom in oil prices. Money managers and other speculators increased their net long positions in US oil futures and options by some 52 million barrels in the week to April 7, the biggest one-week gain in bullish bets since 2011, US Commodity Futures Trading Commission (CFTC) data showed on Friday.
The speculator group raised its combined futures and options position in New York and London by 51,802 contracts to 224,689 during the period, with two-thirds of the increase caused by short traders closing out bearish bets. The net long position is nearly the biggest since last August.
"There continues to be a rush by investors to call a bottom in crude oil by buying into the futures market," said John Kilduff, partner at Again Capital LLC in New York.
"The elevated security concerns over the situation in Yemen are also providing an impetus to be long on supply disruption fears."
The buildup in positions came during a five-day rally in oil markets during which US oil futures gained some $6.60 a barrel or 14 percent to close at their highest in 2015. The next day, however, prices slumped again.
About one-third of the increase in bets came from new long positions in the market, pushing the amount of managed money gross length to the largest since July, when a months-long rout in oil markets had barely begun, the data showed.
But a much larger share, some 33,000 lots, came from traders closing short positions that had ballooned to their highest on record just a few weeks earlier. Those traders may have given up waiting for another slump in prices amid signs of slowing US supply growth and surprisingly robust demand.
Comments
Comments are closed.