Hedge funds have increased bullish bets on crude oil to their highest levels in months, as geopolitical tensions between the US and Iran revive concerns over potential supply disruptions, according to a report by Bloomberg citing ICE Futures Europe data.
Money managers lifted their net-long positions in Brent crude by more than 31,000 contracts in the week to 3 February, taking total bullish bets to nearly 278,000 lots, the highest level in close to ten months, according to the figures. Net-long positions in US West Texas Intermediate also climbed to a six-month high, Commodity Futures Trading Commission data shows.
The build-up in long positions follows four consecutive weeks of increased bullish positioning, driven by persistent friction between Washington and Tehran. Recent confrontations at sea and in the air briefly pushed a geopolitical risk premium back into oil markets, despite later easing as discussions around renewed nuclear talks emerged.
Optimism among oil bulls has also been evident in derivatives markets. Bullish call options on WTI traded at their widest premium to bearish puts since 2022 earlier this week, signalling heightened demand for upside protection.
