Concerns over the impact on oil furures prices from a potential oversupply have seen hedge funds turn net bearish on Brent crude for the first time ever, according to a report by Bloomberg citing data from ICE Futures Europe and the Commodity Futures Trading Commission.
In the week ending 10 September, money managers’ short positions in Brent crude exceeded their long positions by 12,680 contracts, according to ICE Futures Europe, marking the first time such an occurrence has been recorded since data tracking began in January 2011.
While hedge funds remain net bullish on West Texas Intermediate (WTI), their position has shrunk to its lowest level since February, with money managers reducing their net-long Nymex WTI position to 105,024 contracts, according to the Commodity Futures Trading Commission (CFTC) data.
Investors are increasingly worried about a crude oil oversupply in 2025, driven by rising output from non-OPEC nations and weakening demand in China and the US, the world’s top two oil consumers.
This bearish sentiment has also extended to refined products, with hedge funds now the most bearish on diesel in nearly nine years, deepening their net-short position to 38,609 contracts. Gasoline’s net-long position has dwindled to just 5,193 contracts, marking its lowest bullish stance in over seven years. Similarly, gasoil has seen a spike in bearish bets, with hedge funds boosting their net-short position to a record 64,461 contracts.
Algorithmic trading and heavy selling in oil options contributed to pushing prices to their lowest in more than two years earlier this week. However, as the bearish positions became increasingly crowded, some were unwound later in the week, leading to a modest price recovery.
