Oil hedge funds remain cool on further price surges

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– Uncertainty still looms for commodities-focused strategies as Middle East tensions resurface – 

The deadly missile strike against Iranian general Qassem Suleimani at Baghdad Airport on 3 January elevated oil prices amid immediate concerns over renewed conflict in the region. Brent Crude surged to more than USD70 a barrel following the attack, and prices stayed above USD68 early last week, before falling back to just under USD65 on Monday.

But while there may be potential for further episodic bouts of volatility further down the line, commodity-focused hedge fund managers believe that for now, the recent surge has likely hit its ceiling, with higher moves ultimately requiring a material impact on global supply.

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