Hedge funds boosted bullish wagers across the energy complex as crude prices broke out of their recent range, climbing above US$80 a barrel, and petrol prices surge to multi-month highs.

Speculators hiked net long positions in the two benchmark crude futures to a three-month high, while long-only bets in US petrol futures skyrocketed to about 89,278 lots in the week ending Jul 25, the highest in nearly two years, according to data from the Commodity Futures Trading Commission and Intercontinental Exchange. 

The bullish stance is a reversal of months of relatively bearish positioning, and a welcome relief for investors betting on oil strength in the second half of the year as inventories dwindle.  

Energy prices have rallied in recent weeks on signs of tight supply and resilient demand even in the face of rising interest rates. Petrol prices have received a further boost from a spate of refinery issues. 

Speculators also increased bullish bets on Nymex diesel and ICE gasoil to six-month highs. Robust diesel exports have helped offset soft US domestic demand, and Europe continues to pull a large amount of Gulf Coast diesel, making up for dwindling volumes to Brazil. BLOOMBERG