Hedge funds rebuild oil position after OPEC⁺ round trip: Kemp
crude oil after reassurance from Saudi Arabia and its OPEC⁺ allies that any planned future increases in production would be contingent on market conditions.
Last week hedge funds and other money managers turned their attention to boosting Brent positions, after a large jump in NYMEX and ICE WTI the week before, according to records filed with exchanges and regulators.
Fund managers purchased the equivalent of 69 million barrels of futures and options linked to Brent over the seven days ending on June 18, the fourth fastest increase for any week since 2013.
Rapid Brent buying came after fund managers purchased 42 million barrels of NYMEX and ICE WTI, as well as 26 million barrels of Brent, the previous week.
Chartbook: Oil and gas positions
As a result, positions and prices have reverted to where they were before OPEC⁺ announced on June 2 it would increase production from the start of the fourth quarter of 2024, subject to market conditions.
Total Brent and WTI positions amounted to 300 million barrels on June 18 up from an immediate post-announcement low of 164 million on June 4 but barely changed from 319 million on May 28.
Fund managers are pessimistic about the outlook for prices in the short term, with the net position in only the 13th percentile for all weeks since 2013.
But expectations OPEC⁺ was about to flood the market with extra barrels have been allayed after official briefings emphasising the contingent nature of the planned production increases.
Futures prices have also reverted to the same
