Hedge Funds Cut Brent Crude Net-Longs to Lowest in 14 Months

Jan 20, 2014 8:03 am ET

(Updates with producers in third paragraph.)

Jan. 20 (Bloomberg) -- Hedge funds and other money managers reduced bullish bets on Brent crude to the lowest level in 14 months, according to data from ICE Futures Europe.

Speculative bets that prices will rise, in futures and options combined, outnumbered short positions by 85,658 lots in the week ended Jan. 14, the London-based exchange said today in its weekly Commitments of Traders report. The cut of 14,438 contracts, or 14 percent, is the second weekly reduction and brings net-longs down to their lowest since Nov. 13, 2012.

Bearish positions by producers, merchants, processors and users of the North Sea crude outnumbered bullish wagers by 219,522 contracts, a decrease of 37 lots in their net-shorts.

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.

Brent futures declined 0.9 percent on the ICE exchange to $106.39 a barrel in the week to Jan. 14 and were at $106.25 as of 12:35 p.m. London time.

Swap dealers boosted net-long positions in Brent for a second week, increasing them by 9 percent to 199,834 contracts, the highest since Nov. 26.

Money managers’ bullish bets on European gasoil declined for a second week to their lowest since mid-November, falling by 12,809 contracts, or 21 percent, to 47,570 lots, ICE data show.

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

--Editors: Raj Rajendran, Alaric Nightingale