Money managers remain optimistic about oil prices

The optimism by money managers is still strong when it comes to betting on what will happen to oil prices in the U.S. and abroad.

Here’s how Bloomberg News reported it:

Oil optimists pushed bullish wagers to a six-month high as the rally in prices continued.

Money managers raised optimistic wagers on Brent crude for a fifth straight week while closing out pessimistic bets by the most since January as turmoil in major oil-producing nations heightened supply concerns. Short-selling bets on the global benchmark plunged by 18 percent, according to data released Friday.

Short-selling bets on crude prices are on the wane

Hedge fund positioning on U.S. crude told a similar tale, with contracts calling for a decline in West Texas Intermediate falling off by 17 percent.

“There’s not many people who are willing to short this market,” said Tyler Richey, co-editor at Sevens Report in Palm Beach Gardens, Florida. “We could be near a market top, but it’s just too early to tell. Right now, the path of least resistance is higher for oil.”

Brent advanced 1.7 percent this week, bringing its yearly gain to 33 percent, as fighting in Libya and a coup in Sudan added to uncertainty in a market already tightening because of OPEC-led supply cuts. WTI rose for the sixth straight week, the longest run in two years.

The net-long Brent position — the difference between bets on higher prices and wagers on a slide — climbed 2.7 percent to 358,141 futures and options contracts for the week ended April 9, according to London-based ICE Futures Europe. Long positions rose 0.3 percent, reaching their highest point since late October.

Other positions:

  • Money managers increased bets on WTI by 30,722 net-long positions, or 13 percent, to 275,529, according to the U.S. Commodity Futures Trading Commission.
  • Net-long positions on benchmark U.S. gasoline were up 7.5 percent.
  • Net-long diesel positions flipped from bearish to bullish for the first time in five weeks.
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