Hedge funds flocked to WTI raw ahead of Texas Cold Snap | OilPrice.com

Portfolio managers further increased their long positions in the most traded petroleum contracts, where bullish betting was almost exclusively focused on the US benchmark WTI Crude, wrote Reuters columnist John Kemp in a analysis of the latest exchange data.

In the week to February 9, hedge funds and other money managers bought the equivalent of 33 million barrels in the six most traded oil futures and options contracts. Purchases were mainly concentrated on WTI Crude, where the long position increased by the equivalent of 30 million barrels in the week to February 9, suggesting that hedge funds expected the price of US oil to rise as an Arctic explosion was expected to extend that far like Texas, says Kemp.

The long positions in petroleum contracts have now risen for 14 consecutive weeks, which is the longest and largest increase in bullish oil bets since early 2019, according to Kemp.

Expectations of higher WTI crude prices materialized this week and WTI raw prices totaled over $ 60 per. barrel for the first time in more than 13 months on Monday. The last time WTI Crude traded above $ 60 was in early January 2020, before the pandemic began to worry traders and fund managers.

In the week to February 9, extreme positions above or near one-year highs were seen across several commodities from crude oil and copper and corn products, Ole Hansen, head of trading strategy at Saxo Bank, said Monday and commented on the report Commitments of Traders.

The overall net long position in Brent and WTI – the difference between bullish and bearish efforts – rose to a 28-month high of 727,500 lots, the report showed.

This is still 33 percent below the record of 1.1 million lots from March 2018, says Saxo Banks Hansen.

“While short-term momentum indicators began to demand consolidation last week, long-term short-term ratios remain low, indicating that speculative length has further room to grow before trading begins to look crowded,” he added.

By Tsvetana Paraskova for Oilprice.com

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