Bullish bets on oil surged to their highest levels in four months during the penultimate week of 2024 following a surge in activity by hedge funds during the previous week, as investors adjusted their positions ahead of Donald Trump’s return to the White House, according to a report by Bloomberg.

Money managers increased net-long positions on West Texas Intermediate (WTI) crude by 21,694 contracts to a total of 182,895 contracts during the week ending 24 December, according to data from the Commodity Futures Trading Commission. This shift occurred despite WTI trading within a narrow $3 range that week, suggesting the positioning was driven by longer-term strategic bets rather than immediate price movements.

While concerns about a potential supply glut and subdued demand from China are weighing on the market, investors appear to be hedging against upside risks linked to geopolitical and political developments.

Donald Trump’s return to the presidency has added uncertainty to oil markets, particularly regarding US policy towards Iran, a major oil exporter. Ongoing conflicts in Ukraine and the Middle East further contribute to the potential for price volatility in 2025.

Algorithmic traders, who turned net-long on both WTI and Brent crude earlier in December, have continued to expand their positions, according to Bridgeton Research. Their sustained optimism reflects expectations that geopolitical risks and shifting global demand could provide a floor for oil prices in the months ahead.