Money Managers’ Positions in Brent Crude Futures
Bullish money managers returned to Brent futures in the week to 18 June on greater optimism for summer oil demand, while shorts continued to cover their positions. Longs increased w-o-w for the first time in seven weeks, by 41.2mb (+20.7%). On the other hand, short positions declined for the second consecutive week, by 32.7mb (-25%). The recent trends mark a reset in market positioning, with money managers turning bearish too prematurely in the immediate aftermath of the OPEC meeting. The long:short ratio increased from 1.53:1.00 to 2.45:1.00 w-o-w (16th percentile). This indicates that the prevailing sentiment remains relatively bearish, with recent drivers in price action a function of shorts liquidating their positions rather than a bullish catalyst in crude. As such, there remains further capacity for new length to enter, as well as for short positions to exit…
