Hedge Funds Raise Brent Bullish Bets by Most in Three Years

Dec 30, 2013 11:06 am ET

(Updates to add net-long position in second paragraph, CFTC schedule in last paragraph.)

Dec. 30 (Bloomberg) -- Hedge funds and other money managers raised bullish bets on Brent crude by the most in almost three years, according to ICE Futures Europe.

Speculative bets that prices will rise, in futures and options combined, outnumbered short positions by 128,941 lots in the week ended Dec. 24, the London-based exchange said today in its weekly Commitments of Traders report. The increase of 37,570 contracts in the net-long position is the biggest since the data began in January 2011.

Bearish positions by producers, merchants, processors and users of Brent futures outnumbered bullish wagers by 242,600 contracts. The 9 percent decline in their net-short position is the first in four weeks.

ICE publishes, usually each Monday, aggregate numbers for long and short positions for speculators and institutional investors as well as commercial companies that buy or sell futures to protect against price moves. Analysts and investors follow changes in speculators’ positions because such transactions can reflect an expectation of a change in prices.

Brent futures rose 3.2 percent to $111.90 a barrel in the week to Dec. 24 and were at $111.40 as of 3:56 p.m. London time.

Swap dealers trimmed net-long positions in Brent by 2.2 percent to 176,949 contracts in the period.

Money managers’ bullish bets on European gasoil increased by the most in a month, by 11,878 lots, or 18 percent, to 78,021 contracts, ICE data show.

See ICCBBMMN <Index> GP <GO> for a chart of managed money net longs for ICE Brent and ICCBMMMN <Index> GP <GO> for a similar chart for ICE Gasoil.

The Commodity Futures Trading Commission will report traders’ positions in the U.S. crude benchmark, West Texas Intermediate, at 3:30 p.m. in Washington today. The CFTC report is delayed one day because of a public holiday.

--Editors: Stephen Voss, Raj Rajendran