Hedge funds and money managers boosted their bullish wagers on U.S. crude oil to a record high, data showed on Friday, as prices rallied on OPEC’s optimism for greater compliance with its deal with other top global producers to curb output. The speculator group raised its combined futures and options position in two major NYMEX and ICE markets by 21,777 contracts to 443,703 in the week to Feb. 21, U.S. Commodity Futures Trading Commission (CFTC) data showed.
Gross short, or bearish, futures and options positions among money managers fell to the lowest since mid-2014. That brought the net long U.S. crude futures and options positions to the highest on record, based on publicly available data going back to at least 2009, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday. “The buying is supportive but the new record long exposure leaves the market increasingly overbought,” Tim Evans, Citi Futures’ energy futures specialist, said in a note. U.S. oil futures on the New York Mercantile Exchange rallied by about 1.6 percent and averaged $53.43 per barrel during the shortened trading week. Monday was a holiday for U.S. markets for Presidents Day.
OPEC Secretary-General Mohammad Barkindo told an industry conference in London that January data showed conformity from participating OPEC nations with output curbs had been above 90 percent and oil inventories would decline further this year. “All countries involved remain resolute in the determination to achieve a higher level of conformity,” Barkindo said.
Since, the joint OPEC and non-OPEC technical committee reported 86 percent compliance with oil cuts for OPEC and non-OPEC combined for January, according three OPEC sources.
However, swelling U.S. inventories and signs of increased resurgent drilling activity have capped prices.
Crude inventories rose 564,000 barrels in the week to Feb. 17, its seventh straight week of increases, compared with analysts’ expectations for an increase of 3.5 million barrels, the EIA said. [EIA/S] Among refined products, speculators slashed net long futures and options in U.S. gasoline to the lowest in two months. “With the group still net long at 40,969 contracts, there’s potential for this bearish flow to continue,” Evans said. Gasoline inventories have soared in recent weeks as the market grapples with oversupply and demand softened. In Ultra Low Sulfur Diesel (ULSD), money managers boosted their net long positions slightly to 32,955 contracts.
Source: Reuters (Reporting by Devika Krishna Kumar in New York; editing by David Gregorio)