Column: Positive oil outlook draws in fund managers | Reuters
Hedge funds are becoming increasingly bullish on the outlook for oil prices, anticipating that early deployment of coronavirus vaccines will allow a rapid resumption of more normal travel patterns.
Ultra-loose fiscal and monetary policies are also expected to promote a progressive recovery from the massive cyclical downturn in business activity experienced in 2020, giving a big boost to petroleum consumption.
Global petroleum inventories have already been drawing down, and OPEC and its partners are expected to continue restricting output, ensuring stocks return to the five-year average by the middle of 2021.
As a result, portfolio managers have become more bullish towards oil prices than at any time since the end of August, before the arrival of the epidemic’s second wave.
Hedge funds and other money managers purchased the equivalent of 78 million barrels in the six most important petroleum futures and options contracts in the week ending Nov. 24.
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