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Hedge funds cut bullish bets on US crude from near 2-year high

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Oil demand plunged by about 30 per cent worldwide in April as the pandemic curtailed travel and movement globally.

[NEW YORK] Hedge funds and money managers cut bullish wagers on US crude from the highest levels in nearly two years, data showed on Friday, as investors feared a spike in new coronavirus infections would erode global demand further.

The speculator group cut its combined futures and options position in New York and London by 23,948 contracts to 377,173 in the week to June 16, the US Commodity Futures Trading Commission (CFTC) said. Net long positions in US crude had jumped to the highest since early August 2018 a week earlier.

New cases of Covid-19 set records across at least six US states, and mandated mask use is becoming more common as economies continue reopening. China, where the pandemic originated but had been contained, also reported an uptick in new cases of the disease.

Oil demand plunged by about 30 per cent worldwide in April as the pandemic curtailed travel and movement globally.

In international benchmark Brent, speculators raised net long positions by 1,682 contracts to 185,220 in the week to June 16, data from Intercontinental Exchange showed. That is the highest level since early March.

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Global oil prices have been supported after the Organization of the Petroleum Exporting Countries and allies, known as Opec+, said they would cut output by a record 9.7 million barrels per day (bpd) - or 10 per cent of global supply - from May after oil demand plunged.

After July, the cuts are due to taper to 7.7 million bpd until December.

Meanwhile, natural gas speculators in four major NYMEX and ICE markets cut their net long position by 50,526 contracts to 73,409 in the week to June 16, CFTC data showed.

REUTERS

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