LONDON (Reuters) – Hedge fund managers continued to liquidate former bullish positions in oil last week and for the first time in more than a year clear signs of fresh short-selling emerged. Rising oil production from Saudi Arabia, the United Arab Emirates, Kuwait and Russia has eased concerns about the availability of supplies once U.S. sanctions on Iran are re-imposed in November. At the same time, intensifying fears about a possible global economic slowdown have hit oil prices and equity markets hard over the last three weeks. The bullish wave of hedge fund position-building in oil and refined products that started in July 2017 and crested in January 2018 has now largely broken. Portfolio managers’ combined positions in crude and refined products climbed from a low of 310 million barrels at the end of June 2017 to almost 1.5 billion barrels in late January but have since fallen back to just over half that level. Fund managers have not yet turned bearish on the outlook for oil prices; U.S. sanctions on Iran are deterring all but the most aggressive sellers. But the hedge fund community is no longer significantly bullish, with most managers opting to realize their profits after a… continue reading
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