Hedge funds offloaded energy stocks at the fastest pace since September 2024 – and the second quickest rate in the past decade – last week, as crude oil prices dropped sharply following easing geopolitical tensions in the Middle East, according to a report by Reuters.
The report cites a Goldman Sachs client note seen by Reuters as revealing that beginning 23 June, funds exited positions across oil, gas, and energy services stocks in every major region, with North America and Europe seeing the heaviest selling. In Europe, hedge funds not only sold long positions but also ramped up shorts, the note said.
The broad-based selloff coincided with a $10 fall in oil prices after a ceasefire between Israel and Iran, alongside concerns over rising supply from OPEC+. Despite the pullback, aggregate hedge fund positioning remains net long on global energy stocks.
Goldman also noted that hedge fund gross leverage – a measure of overall market exposure – remains at a five-year high. Despite the energy sector retreat, the week also saw the biggest hedge fund stock buying activity in five weeks, with financials, tech, and industrials among the most bought sectors globally.
