Hedge funds bullish as oil prices hit multi-year highs: Kemp

Hedge funds bullish as oil prices hit multi-year highs: Kemp

(John Kemp is a Reuters market analyst. The views expressed are his own) LONDON- Hedge funds boosted their position in petroleum last week to pre-pandemic levels, encouraged by signs of a rapidly recovering global economy and continued output restraint among U.S. shale producers. Money managers purchased the equivalent of 52 million barrels in the six most important petroleum futures and options contracts in the week to June 8, exchange and regulatory data shows. The net position climbed to 919 million barrels, the highest since January 2020 before the pandemic took hold. Prior to that, it was the highest since the peak reached in October 2018 before the trade war between the United States and China intensified. Fund positions broke out of the previous range of 850 million barrels +/- 50 million at the same time Brent prices broke out of their previous $65 +/- $5 range and closed above $70 a barrel for the first time since 2018/19. Portfolio managers were big buyers of both NYMEX and ICE WTI (+28 million barrels) and Brent (+23 million) and small purchasers of European gas oil (+4 million), but sellers of U.S. diesel (-1 million) and gasoline (-2 million). Across all six contracts,