Oil was sick even before China’s coronavirus hit

Oil was sick even before China’s coronavirus hit

Oil succumbed to the coronavirus because its immune system was compromised already.. Like the outbreak itself, oil's problems began in December with a fever of its own.. Hedge funds' net length in the major crude and product contracts surged from less than 600 million barrels-equivalent to almost 900 million between early December and early January.. On a rolling four-week basis, December saw the sharpest increase in long positions in my entire data series going back to the start of 2011 (and net length increased at its fastest rate in more than two years).. You can see this in the roughly 140 million barrel-equivalent expansion of swap dealers' net short position in Nymex light sweet crude between early December and early January, a proxy for hedging activity by producers..