Hedge Funds Raise ICE Brent Crude Net-Longs to 10-Week High

Jan 06, 2014 7:25 am ET

(Updates with producers in third paragraph.)

Jan. 6 (Bloomberg) -- Hedge funds and other money managers raised net bullish bets on Brent crude to the highest level in 10 weeks, according to data from ICE Futures Europe.

Speculative bets that prices will rise, in futures and options combined, outnumbered short positions by 136,611 lots in the week ended Dec. 31, the London-based exchange said today in its weekly Commitments of Traders report. The addition of 7,670 contracts, or 6 percent, is a second weekly increase and brings the net-long position to the highest since Oct. 22.

Bearish positions by producers, merchants, processors and users of the North Sea crude outnumbered bullish wagers by 242,398 contracts, a reduction in their net-short position by 202 lots.

Brent futures declined 1 percent to $110.80 a barrel in the week to Dec. 31, capping their first annual loss in five years, and were at $107.78 as of 12:03 p.m. London time.

ICE publishes, usually each Monday, aggregate numbers for long and short positions for speculators such as hedge funds 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.

Swap dealers trimmed net-long positions in Brent by 5 percent, in a second weekly reduction, to 168,052 contracts. That brings their net-long position to the lowest since April 2.

Money managers’ bullish bets on European gasoil increased for a second week, by 7,242 lots, or 9.3 percent, to 85,263 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.

--Editors: Raj Rajendran, Sharon Lindores