In the week ending 21 January, money managers reduced their shorts in both crude futures benchmarks. In contrast, they added length in Brent for the second consecutive week but reduced length in WTI futures. The oil market was tentative approaching Trump’s inauguration, and the bullish momentum in crude flat price had quickly waned, registering six consecutive days of decline since 16 Jan. Nonetheless, hedge fund positioning in crude futures is the most bullish since April 2024, when Brent flat price last surpassed $90/bbl. With flat price lagging around $80/bbl relative to 2024, buy-side positions are relatively overcrowded at these levels.
