OPEC+ surprise squeezed oil shorts: Kemp

OPEC+ surprise squeezed oil shorts: Kemp

LONDON - Investors bought petroleum futures and options at the fastest rate for more than three years after Saudi Arabia and other OPEC+ producer group members announced voluntary cuts in oil output.

Hedge funds and other money managers bought the equivalent of 128 million barrels in the six most important petroleum futures and options contracts over the seven days to April 4.

The buying came as OPEC+ announced cuts totalling more than 1 million barrels per day on April 2 and after fund managers had already purchased 61 million barrels the previous week.

Purchases centred on crude, in both Brent (+73 million barrels) and NYMEX and ICE WTI (+60 million barrels), with small sales of European gas oil (-2 million) and U.S. diesel (-3 million) and no change in U.S. gasoline.

CRUDE SQUEEZE

With its surprise announcement, OPEC+ successfully squeezed the shorts in crude petroleum, with bearish positions reduced to the lowest for 11 weeks since late January.

Since March 21, funds have purchased a total of 174 million barrels of crude, the fastest rate since December 2019 and before that September 2017.

Bearish short positions were cut by 113 million barrels while fund managers added 61 million barrels of new bullish long positions.

The net long position