Commentary: Hedge funds turn negative on oil – Kemp

LONDON (Reuters) by John Kemp – Hedge fund managers were net sellers of petroleum-linked futures and options for a fifth week running last week as concerns about sanctions on Iran evaporated and investors refocused on economic worries. The net long position in the six most important petroleum-linked futures and options contracts was cut by a further 73 million barrels in the week to Oct. 30. Portfolio managers have been net sellers of 371 million barrels since the end of September, taking their net long position to the lowest level for 15 months, according to records published by regulators and exchanges. The sharpest sell-offs last week were in Brent (-54 million barrels) and U.S. gasoline (-11 million) with smaller reductions in NYMEX and ICE WTI (-2 million), U.S. heating oil (-4 million) and European gasoil (-2 million). Position changes are no longer confined to long liquidation. Fund managers have started to establish short positions betting on further price falls. Short positions across all six contracts have doubled over the past five weeks to 192 million barrels, the highest level for more than 10 months. Fund managers still favour bullish long positions over bearish short ones by a ratio of almost 5:1,… continue reading

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