Disappointing demand has prompted hedge funds to cut their net-bullish bets on gasoline to levels not seen since the height of the pandemic, with speculators drastically reducing their net-long positions in gasoline futures, according to a report by Bloomberg.
The report cites data from the Commodity Futures Trading Commission as highlighting that money managers reduced their net positions by 9,001 lots, bringing the total to 22,158 in the week ending 23 July, the lowest level in four years. The move marks a divergence from the usual seasonal pattern where gasoline demand peaks during the US summer travel period. Funds also now hold the largest short-only position in approximately seven years, according to the CFTC.
The Energy Information Administration reported a decline in gasoline demand for the week ending 23 July, which came on the back of a subdued 4 July travel period, with export disruption caused by Hurricane Beryl also exacerbating the situation.
According to the report though, there are signs of a potential rebound with demand subsequently picking up and stockpiles beginning to decrease. Rob Thummel, a portfolio manager at Tortoise Capital Advisors, said: “It’s still summer driving season. There’s still vacation. There could still be some good demand numbers over the next several weeks.”
