Hedge funds sharply increased their long positions in crude oil futures in the week preceding Israel’s recent strikes on Iran’s nuclear infrastructure, putting them in prime position to capitalise on the ensuing surge in prices, according to a report by Bloomberg.
The report cites data from the Commodity Futures Trading Commission (CFTC) as showing that money managers added 16,056 net-long contracts on West Texas Intermediate (WTI) crude during the week ended 10 June, bringing total bullish bets to 179,134 contracts – the highest level seen since January. NMeanwhile, net-long positions in Brent crude meanwhile, also climbed to a 10-week high, according to data from ICE Futures Europe.
The ramp-up in bullish sentiment came amid a mix of supportive macro catalysts, including thawing trade tensions between the US and China and ongoing production outages in Canada due to wildfires that disrupted nearly 350,000 barrels per day of heavy crude output in Alberta.
Just days after the positioning shift, oil futures experienced their biggest single-day gain in more than three years, triggered by Israel’s major aerial offensive against Iranian nuclear sites—an event that reignited geopolitical risk premia across global energy markets.
For hedge funds, the timing proved prescient. By scaling up bullish exposure just ahead of the escalation, many managers were able to capture outsized gains as crude markets rallied on renewed fears of Middle East supply disruptions.
