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Hedge funds and other money managers were net
sellers of petroleum futures and options last week for the fifth
time in seven weeks, according to an analysis of data published
by regulators and exchanges.
Fund managers sold a total of 26 million barrels in the six most
important futures and options contracts in the week to Sept. 3,
bringing total sales to 148 million barrels since mid-July
(https://tmsnrt.rs/2N68yqi).
Portfolio managers held a net long position of just 499 million
barrels last week, only fractionally above the long-term
"structural" long position of 491 million barrels.
As a result, funds have cut their dynamic net long position to
just 8 million barrels, down from a recent peak of 420 million
in April, and the lowest since February.
In the most recent week, funds were net sellers of U.S. gasoline
(-19 million barrels), U.S. heating oil (-4 million) and
European gasoil (-3 million), reflecting the deteriorating
outlook for fuel consumption.
Position changes in crude were a wash, with net purchases of
Brent (+18 million barrels) offset by net sales of NYMEX and ICE
WTI (-18 million).
Overall, the hedge fund community's positioning across the
petroleum complex is now neutral to bearish, with concerns about
the deteriorating economy more than offsetting production cuts
by Saudi Arabia and its allies.
Until the threat of recession is realized, or lifted, portfolio
managers are likely to remain cautious and avoid running a
significant net long or short position across the complex.
(John Kemp is a Reuters market analyst. The
views expressed are his own.)
(Editing by David Evans)
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