Oil at the crossroads as hedge funds build large bullish position: Kemp - Reuters

Oil at the crossroads as hedge funds build large bullish position: Kemp - Reuters:

Even before Iranian general Qassem Soleimani was killed by a U.S. air strike on Jan. 3, ratcheting up tensions across the Middle East, hedge funds had become very bullish about oil prices.

Fund managers amassed an unusually large net long position in petroleum futures and options towards the end of last year in anticipation of the global economy picking up in 2020, but that also leaves prices vulnerable to a correction if the recovery is delayed or fails to materialize.

Hedge funds and other money managers had raised their combined net long position in the six most important petroleum futures and options contracts to 951 million barrels on Dec. 31, the highest for almost 15 months.

Not only was that the largest bullish position of 2019, it was more than double early October’s low of 437 million barrels and triple the low for the year of just 302 million back in January.