Hedge funds have exited bearish positions on Brent crude at the fastest pace in nearly eight years, amid heightened geopolitical risks from the escalating conflict in the Middle East, according to a report by Bloomberg citing data from ICE Futures Europe.
The data reveals that money managers cut short positions on Brent by 47,977 contracts, reducing the total to 91,222, marking the largest reduction since December 2016.
The shift comes amid rising tensions following a missile attack last week, with Israel still weighing how to respond to Iran. While US President Joe Biden has advised against targeting Iran’s energy infrastructure, the uncertainty is leaving investors cautious, avoiding bearish bets on oil futures.
In total, speculators boosted their bullish positions on both Brent and West Texas Intermediate (WTI) by 117,227 net-long contracts, bringing the combined net-long positions to 263,135, according to weekly data from ICE and the US Commodity Futures Trading Commission (CFTC). This represents the most bullish stance in 10 weeks.
Additionally, hedge funds increased bullish bets on Nymex gasoline, raising net-long positions by 13,702 to 39,464 contracts, the most optimistic outlook in 20 weeks, based on CFTC data.
