Hedge fund positioning shifts in expectation of oil price peak: Kemp

Hedge fund positioning shifts in expectation of oil price peak: Kemp

(John Kemp is a Reuters market analyst. The views expressed are his own)LONDON- Hedge funds sold petroleum for the second week running as crude prices topped $65 a barrel, the highest level since before the COVID-19 pandemic.The equivalent of 11 million barrels in petroleum futures and options were sold by hedge funds and other money managers in the week ending March 2, according to records published by regulators and exchanges.Funds have sold a total of 20 million barrels over the two most recent weeks after purchasing 548 million barrels over the previous 15 weeks since the announcement of successful trials of COVID-19 vaccines in early November.In the latest week, there were small sales of Brent (-4 million barrels), NYMEX and ICE WTI (-3 million), European gasoil (-5 million) and U.S. gasoline (-2 million), with a small amount of U.S. diesel buying (+3 million).Prior to sales over the last two weeks, the combined position across all six contracts had reached the 82nd percentile for all weeks since the start of 2013 – a lopsided position that remains little changed.Bullish long positions outnumbered bearish short ones by a ratio of more than 6:1, the most since the start of 2020 and before