Hedge funds and other institutional investors sold off the equivalent of 48 million barrels in the six most significant oil futures and options contracts during the week ending 20 August, bringing to an abrupt end the brief rally of the previous week, according to a report by Reuters.
The reports cites data from exchanges and regulators as showing that the sales mark the sixth week of selling out of the last seven with a total of 346 billion barrels having now been sold since early July.
The combined position of these funds has now dwindled to just 178 million barrels, the fourth-lowest level recorded since weekly data began in 2013, and down significantly from a recent high of 524 million barrels on 2 July.
In the most recent week, fund managers sold off European gas oil (-20 million barrels), NYMEX and ICE WTI (-18 million barrels), Brent crude (-9 million barrels), and U.S. diesel (-4 million barrels). The only positive movement was in U.S. gasoline, where managers purchased the equivalent of 3 million barrels.
Even as confidence grows that the Federal Reserve and other major central banks might lower interest rates to encourage consumer spending and business investment, concerns about weak growth in oil consumption persist, while fears of potential output increases by Saudi Arabia and its OPEC+ allies starting in October, are adding to the uncertainty.
