Oil Speculators Most Bullish on U.S. Crude Price in Two Months

21-Sep-2015

Hedge funds slashed their bets on falling oil prices, leaving them the most bullish on U.S. crude futures in two months.


Money managers’ net-long position in West Texas Intermediate rose by 14,821 contracts to 147,678 futures and options in the week ended Sept. 15, according to data from the Commodity Futures Trading Commission. That’s the highest level since July 7. In contrast, traders curbed their bullish positions in European benchmark Brent by the most in a month.

The Organization of Petroleum Exporting Countries assumes crude prices will rise to $80 by 2020 as output falls elsewhere. U.S. production could sink by the most in 27 years in 2016 as the price rout extends a slump in drilling. Speculators closed out short positions two days before the Federal Reserve decided not to raise key U.S. interest rates.

“The market’s not as oversupplied as we think it is,” David Pursell, a managing director at investment bank Tudor Pickering Holt & Co. in Houston, said in a phone interview. “The news out of OPEC is more bullish, U.S. production is falling and demand is great right now.”

The U.S. benchmark oil contract fell 2.9 percent in the report week to $44.59 a barrel on the New York Mercantile Exchange. Prices climbed 4.5 percent Monday to $46.68. (by Dan Murtaugh, Bloomberg)