Hedge Funds Have Never Been This Pessimistic About the Oil Market

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Oil Prices Nyheter

Hedge Funds,Bearish Sentiment,Economic Slowdown

Hedge funds and other asset managers have reached unprecedented levels of bearishness on oil prices due to a global economic slowdown and concerns about OPEC's ability to counter the trend.

Hedge funds and other asset managers have never been more pessimistic about the outlook for petroleum prices, as signs multiply that the major industrial economies are losing momentum according to energy analyst John Kemp. Investors have also concluded Saudi Arabia and its OPEC allies have run out of options and either cannot or will not restrict their own production further to offset the slowdown in consumption growth and slide in prices.

Investors are extraordinarily pessimistic even though benchmark Brent futures prices have already fallen to their lowest in real terms since early 2021. After adjusting for inflation, crude prices have retreated to levels last seen when the major economies were still in the grip of the coronavirus pandemic and the first successful vaccines had only recently been announced.

Investors are cautiously building a bullish position in U.S. natural gas as ultra-low prices and record consumption by gas-fired generators whittle away excess inventories inherited from the exceptionally mild winter of 2023/24. Hedge funds purchased the equivalent of 192 billion cubic feet bcf in the two major futures and options contracts tied to prices at Henry Hub in Louisiana over the seven days ending on September 10.

 

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