Hedge funds await OPEC+ oil output decision: Kemp

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LONDON — Hedge funds made few modifications to their petroleum positions final week whereas merchants awaited a call on manufacturing ranges by the Group of the Petroleum Exporting Nations (OPEC) and its allies.

Cash managers lower their mixed place within the six most vital futures and choices contracts by the equal of solely three million barrels within the week to June 29, trade and regulatory data present.

The full place remained excessive at 940 million barrels, within the 84th percentile for all weeks because the begin of 2013, and the third week positions have been in a variety of 940 million to 945 million barrels.

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Portfolio managers stay bullish on the outlook for costs, with lengthy positions outnumbering quick ones by a ratio of 5.76:1, the 78th percentile since 2013 (https://tmsnrt.rs/3dHlNcE).

However with a considerable web lengthy place already established and costs above the inflation-adjusted common since 2000, new shopping for has stopped because the center of June.

The newest week noticed small purchases of U.S. gasoline (+7 million barrels) and European fuel oil (+1 million) however they have been greater than offset by gross sales of Brent (-1 million) and NYMEX and ICE WTI (-10 million).

With crude costs now above their post-2000 common in actual phrases, stress is mounting on OPEC and its allies, collectively often called OPEC+, to reply and forestall the market from overheating by growing manufacturing.

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Most hedge fund managers are betting that OPEC+ will likely be sluggish to alleviate the market scarcity, preferring to permit costs to overshoot for some time.

However the longer and better the overshoot, the extra the stress will construct on OPEC+ to regulate manufacturing technique, which explains why bullish positioning has been tempered for now.

Associated columns:

– Falling U.S. crude shares draw hedge fund consideration (Reuters, June 28)

– Oil costs soar at the same time as consumption stays beneath development (Reuters, June 25)

– Oil bulls wager on restraint by OPEC+ and U.S. shale corporations (Reuters, June 22)

– U.S. shale restraint pushes oil costs to multi-year excessive (Reuters, June 4) (Enhancing by David Goodman)