PW
Español

 

PW
Guyana
Surinam


PW
Trinidad

& Tobago

 

Precios
Gráficos





Very usefull links







Very usefull links







Very usefull links





 

 

 

PW ISSUES....
Inside, confidential and off the record

 

 

Hedge fund oil trades

 



 

Hedge fund oil trades are becoming crowded: Kemp




 
Climbing oil prices continue to attract fresh buying interest from hedge funds while piling pressure on bearish portfolio managers, but the trade is becoming crowded and at risk of a sudden reversal.
 
Hedge funds and other money managers purchased the equivalent of 24 million barrels in the six most important petroleum-related futures and options contracts in the week to Oct. 5, regulatory records show.
 
Purchases over the past six weeks have totalled 194 million barrels, reversing more than two thirds of the 268 million barrels sold over the previous 10 weeks when the market was gripped by fear about rising coronavirus cases.
 
In the most recent week there was broad-based buying of NYMEX and ICE WTI (+9 million barrels), U.S. gasoline (+9 million), Brent (+4 million) and U.S. diesel (+3 million), with minor sales in European gas oil (-1 million).
 
The number of short positions across all six contracts has fallen to only 151 million barrels, the lowest for 124 weeks, as continued price escalation forces bearish fund managers to close out positions.
 
Portfolio managers now have a strongly bullish position across the six contracts, with a net long of 871 million barrels (78th percentile for all weeks since 2013), up from 677 million barrels (59th percentile) on Aug. 24.
 
Positions have become relatively stretched, with bullish longs outnumbering bearish shorts by a ratio of 6.76:1 (84th percentile), up from 4.25:1 (57th percentile) six weeks ago ( https://tmsnrt.rs/2YAqhNT).
 
Fund managers are especially bullish towards middle distillates, which are the most highly geared to the economic cycle and will also benefit from any gas-to-oil switching this winter as a result of soaring global gas prices.
 
The combined net long position across U.S. diesel and European gas oil has reached 152 million barrels (87th percentile), with longs outnumbering shorts by more than 12:1 (98th percentile).
 
Fund managers expect global manufacturing and freight business to continue growing strongly, supporting oil and distillate demand, with winter heating demand and high gas prices providing an extra boost.
 
But the increasingly lopsided positioning is creating a source of fragility and raises the probability of a sharp sell-off and retreating prices if economic growth or fuel switching disappoints expectations.
 
Extremely stretched long-short ratios have previously preceded a sharp reversal in the price trend when fund managers try to realise some of their paper profits. And the current lack of hedge fund short positions means there may be few speculative buyers to absorb such selling, raising the risk of sharp pull back in prices.


Chartbook: https://tmsnrt.rs/2YAqhNT

By John Kemp | Reuters / Oct. 11, 2021

john@jkempenergy.com


PW ISSUES.... 10 / 11 /2021

Inside, confidential and off the record

Is an independent journalist effort from Petroleumworld, on Inside, Confidential and Off The Record Information, the views are not necessarily those of Petroleumworld

Follow us in : twitter / Facebook

Send this story to a friend Copyright© 1999-2021. Petroleumworld or respective author or news agency. All rights reserved.

We welcome the use of Petroleumworld™ stories by anyone provided it mentions Petroleumworld.com as the source. Other stories you have to get authorization by its authors.Internet web links to http://www.petroleumworld.com are appreciated.

Petroleumworld welcomes your feedback and comments, share your thoughts on this article, your feedback is important to us!

We invite all our readers to share with us
their views and comments about this article.Write to editor@petroleumworld.comBy using this link, you agree to allow PW
to publish your comments on our letters page. Petroleumworld.com

Hit your target - Advertise with us



Any question or suggestions,
please write to: editor@petroleumworld.comBest Viewed with IE 5.01+ Windows NT 4.0, '95,
'98,ME,XP, Vista, Windows 7,8,10 +/ 800x600 pixels





 

 


TOP

Contact: editor@petroleumworld.com/Telephone:(58 414) 276 3041

Editor:
Elio Ohep.

Director & Producer: Elio Ohep

Contact: editor@petroleumworld.com

Advertising:Malena Vasquez:58 412 952 5301
Technorati Profile
PW in Top 100 Energy Sites


CopyRight ©1999- 2021, Petroleumworld ™  / Elio Ohep- All rights reserved

 

Legal Information This site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.
We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from Petroleumworld or the copyright owner of the material.Internet Web links to http://www.petroleumworld.com are apreciated.

Petroleumworld no se hace responsable por los juicios de valor emitidos por esta publicacion, por sus colaboradores y columnistas de opinión y análisis. Aceptamos colaboraciones previa evaluación por nuestro equipo editorial, estamos abiertos a todo tipo o corriente de opiniones, siempre y cuando a nuestro juicio esten dentro de valores éticos y morales razonables. Petroleumworld alienta a las personas a reproducir, reimprimir, y divulgar a través de los medios audiovisuales e Internet, los comentarios editoriales y de opinión de Petroleumworld, siempre y cuando esa reproducción identifique a la fuente original, http://www.petroleumworld.com y se haga dentro de el uso normal (fair use) de la doctrina de la sección 107 de la Ley de derechos de autor de los Estados Unidos de Norteamérica (US Copyright) Internet Web links hacia http://www.petroleumworld.com son apreciadas.

.