LONDON Reuters Faltering oil prices, triggered by concern over a third wave of the novel coronavirus and increased confidence OPEC would boost production, gave portfolio managers a chance to book profits on tactical short positions.
Hedge funds and other money managers purchased the equivalent of 24 million barrels in the six most important petroleum futures and options contracts in the week to July 13.
The buying partially reversed larger sales of 63 million barrels the week before, position records published by ICE Futures Europe and the U.S. Commodity Futures Trading Commission show.
But most of the buying consisted of repurchases of previous short sales 15 million barrels rather than the initiation of new long positions 8 million, implying it was motivated by profittaking after prices fell.
Purchases were spread across NYMEX and ICE WTI 11 million barrels, Brent 9 million, U.S. gasoline 4 million and U.S. diesel 3 million, but there were sales of European gas oil 4 million.
On balance, portfolio managers remain bullish, with the net position 901 million barrels in the 81st percentile and ratio of long to short positions 5.741 in the 77th percentile for all weeks since 2013.
But there has been little additional strategic buying since the middle of February, when benchmark Brent futures were already trading at 63 per barrel, compared with around 72 in midJuly.
As a result, the net position across all six contracts has cycled around 875 million barrels…