Hedge fund managers continued to square up positions after the Opec meeting on May 25 left oil production allocations unchanged for another nine months. Money managers increased their combined net long position in the three main Brent and WTI futures and options contracts by 20 million barrels in the week to May 30. Fund managers also increased their net long position in US gasoline by 7 million barrels and in US heating oil by 6 million barrels, analysis of position data published by regulators and exchanges showed.

But most of these position changes were driven by the closure of previous bearish short positions rather than the creation of new bullish longs.

Short positions in crude, gasoline and heating oil were cut by 27 million barrels, 6 million barrels and 8 million barrels respectively for a total decrease of 41 million barrels. By contrast, long positions in crude and heating oil were cut by 8 million and 2 million barrels respectively, while gasoline longs rose by a mere 1 million barrels, making for a total reduction of 9 million barrels.

Copyright Reuters, 2017