Money managers cut their bullish bets on WTI and Brent crude for a second straight week, even though the Strait of Hormuz standoff remains unresolved. ING and Saxo Bank analysts say the pullback signals thin conviction in a sustained rally, while prices rebounded to start this week on fresh Iran and Houthi headlines.
Portfolio managers trimmed their net long position in NYMEX WTI crude futures by 7,257 lots to 101,050 lots in the week to Aug. 4, exchange data show. They cut the net long position in ICE Brent crude futures even harder, slashing it by 20,361 lots, or 11%, to 164,722 lots. This marked the second consecutive weekly decline in speculative positioning across the two crude benchmarks, as traders remain hesitant to add more bullish bets on a rally despite no real progress on reopening the Strait of Hormuz.
ING commodities strategists Warren Patterson and Ewa Manthey wrote that "Speculative sentiment turned more cautious last week." Ole Hansen, Head of Commodity Strategy at Saxo Bank, said the combined crude net long fell by 25k to 266k contracts, following 171k of net buying during the previous three weeks. He added that positioning continues to signal limited conviction in a sustained price rally despite persistent geopolitical supply risks.
Crude prices opened this week higher after Iran set six demands for a peace deal with the United States. The Houthis also claimed they struck an Aramco refinery in Jazan. As of 10 a.m. ET, Brent front-month futures were up 2.70% at $85.81. WTI crude was trading 2.69% higher at $80.28 over the same period.
Source: Oilprice.com
Trading involves risk.
Risk Disclaimer
