En Español

Very usefull links


News links




Dow Jones

Oil price



Views and News





Oil investors at the peak bullishness on oil: Kemp





By John Kemp

Petroleumworld 10 17 2017

The wave of investor bullishness towards oil that started back in July and August may have peaked at the end of September, according to the latest position records published by regulators and exchanges.

Hedge funds and other money managers cut their net long position in the five major futures and options contracts linked to petroleum by a total of 32 million barrels in the week to Oct. 10.

Hedge funds cut their net long position in every one of the major benchmarks including Brent (-16 million barrels), WTI (-7 million barrels), U.S. gasoline (-4 million) and U.S. heating oil (-5 million).

Fund managers had accumulated a record number of long positions in the petroleum complex by the end of September and the net position in many individual contracts was at or close to record levels.

But fund managers have now cut their net long position in petroleum for two weeks in a row and oil prices have generally drifted lower since the end of last month ( tmsnrt.rs/2xKikXS ).

Adding to the downward pressure on prices, portfolio managers also cut their net long position in European gasoil by almost 1.6 million tonnes last week from the record of 18 million tonnes set the week before.

Investor positioning in petroleum markets had become stretched by the end of September, as many traders and analysts noted at the time.

Since the start of 2015, lopsided positioning by hedge funds and other money managers has been a good indicator of an approaching reversal in prices.

So the concentration of long positions and absence of shorts posed an increasing risk of a price correction in the event the rally stalled and fund managers attempted to realise some of their profits.

Some investors are already anticipating a renewed down-cycle in prices with short positions in NYMEX WTI increasing by more than 17 million barrels since Sept. 26.

Positioning and fundamentals now point in opposite directions which will create some short-term tension in oil prices.

A synchronised global economic expansion and strong growth in oil consumption and heavy refinery runs should continue to reduce global oil inventories and push oil prices higher in 2018.

In the short term, the threat of conflict in northern Iraq and the potential disruption of oil production and pipeline exports from the Kirkuk area could also boost prices.

But the overhang of hedge fund long positions built up since the end of July may limit further price rises until it has been worked down to a more sustainable level.

Story by John Kemp from Reuters.

reuters.com 10 16 2017

We invite all our readers to share with us
their views and comments about this article.
Write to editor@petroleumworld.com

By using this link, you agree to allow PW
to publish your comments on our letters page.

Any question or suggestions,
please write to: editor@petroleumworld.com

Best Viewed with IE 5.01+ Windows NT 4.0, '95,
'98,ME,XP, Vista, Windows 7,8,10 +/ 800x600 pixels

Nov 13-14 ;
Mexico City, Mexico





Contact: editor@petroleumworld.com,

Editor & Publisher:Elio Ohep/
Contact Email: editor@petroleumworld.com

CopyRight © 1999-2016, Paul Ohep F. - All Rights Reserved. Legal Information

PW in Top 100 Energy Sites

CopyRight©1999-2017, Petroleumworld   / Elio Ohep - All rights reservedThis site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission fromPetroleumworld or the copyright owner of the material.