Hedge Funds Cut Brent Crude Net-Longs to Lowest in Four Months

Date: Tuesday, October 29, 2013
Author: Morgane Lapeyre, Bloomberg

Hedge funds and other money managers cut bullish bets on Brent crude to the lowest in almost four months, according to ICE Futures Europe.

Speculative bets that prices will rise, in futures and options combined, outnumbered short positions by 150,161 lots in the week ended Oct. 22, the London-based exchange said today in its weekly Commitments of Traders report. That’s a reduction of 11,851 contracts, or 7.3 percent, from the previous week, and brings their net-long positions to its lowest level since July 2.

Bearish positions by producers, merchants, processors and users of Brent outnumbered bullish wagers by 332,177, a 3.2 percent decrease in their net-short position from Oct. 15.

ICE publishes, usually each Monday, aggregate numbers for long and short positions for speculators and institutional investors, as well as commercial companies that buy or sell futures to protect against price moves. Analysts and investors follow changes in speculators’ positions because such transactions can reflect an expectation of a change in prices.

Brent futures were little changed at $109.97 a barrel in the week to Oct. 22 and traded at $107.58 as of 12:13 p.m. London time today on the ICE exchange.

Swaps dealers increased net-long positions in Brent by 15.1 percent to 205,244.

Money managers’ net-long bets on European gasoil rose by 7.6 percent to 77,324 lots.