OPEC+ plan turns hedge funds least bullish on crude in decade

(Bloomberg) — Hedge funds dumped bullish bets on Brent crude and rose short against the global benchmark — sending its positioning to its least bullish in nearly a decade — after OPEC and its allies decided to revive a part of the production this year.

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Money managers’ net long position in Brent crude fell by 102,075 lots to a total of 45,678 lots by Tuesday, ICE Futures Europe’s weekly futures and options data showed. This is the lowest level for the net-long position since September 2014.

Brent crude futures fell below $78 a barrel this week, the lowest level in four months, after OPEC and its allies agreed over the weekend to return some supplies to the market starting in October. Crude oil had already weakened for more than a month on weak demand and declining geopolitical risks, and trend-following algorithms accelerated the decline after the decision surprised some market participants.

Later in the week, OPEC+ ministers reiterated that the plan to restart some production depends on market conditions. The comments helped oil par its losses for the week and could prompt a reversal of money managers’ positions in next week’s data.

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