Hedge Funds Began Dumping Bullish Oil Bets Ahead of Price Rout - BNN Bloomberg

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Hedge funds began unwinding some of their bullish oil wagers heading into this week’s market crash — but not fast enough.

As of Tuesday, bets on rising oil prices remained at the highest level in in 19 months, even after money managers cut net-long positions in Brent and WTI by 32,429 contracts to 491,503, according to ICE and CFTC data released on Friday.

Investors rapidly unwinding the sky high positioning exacerbated oil’s rout, propelling prices to crash about $7 in just two days. The speculator group had only started to turn bullish on oil around late June, after supply curbs from Saudi Arabia and allies began to tighten the market. While signs of physical market strength persist, investor sentiment has soured on interest-rate fears, and momentum-based traders have rushed to exit as macroeconomic fears take center stage again.

Money managers also slashed their bullish Nymex gasoline bets by 2,985 net-long positions to 48,436, the CFTC data showed, the least bullish in almost three months. That came just ahead of US government data showing consumption of the motor fuel plummeted to the lowest in 25 years seasonally.The global sell-off in bonds is a sign of acceptance that higher interest rates will be around for longer, experts say, noting that the shift holds implications for borrowing rates and mortgage holders.

The United Auto Workers union has decided not to expand its strikes against Detroit's three automakers after General Motors made a breakthrough concession on unionizing electric vehicle battery plants.Rising food costs in Canada have prompted the federal government to demand change from the country’s leading grocers – but an expert in the industry says plans announced from Ottawa this week won’t bring quick relief from high grocery bills.

 

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