Monday 17 January 2022

Column: Looking beyond Omicron, oil investors focus on tight supply | Reuters

Column: Looking beyond Omicron, oil investors focus on tight supply | Reuters

Portfolio managers purchased oil last week at the fastest rate for 14 months amid growing confidence that the latest wave of coronavirus infections will not have a significant effect on international aviation and oil consumption.

Hedge funds and other money managers purchased the equivalent of 83 million barrels in the six most important petroleum-linked futures and options contracts in the week to Jan. 11.

Fund managers have purchased a total of 184 million barrels over the four most recent weeks as bullish sentiment returned after selling 327 million barrels in the 10 previous weeks.

Bullish long positions now outnumber bearish short ones by a ratio of 6.2 to 1 (in the 80th percentile for all weeks since 2013) up from a ratio of only 3.8 to 1 (47th percentile) on Dec. 14.

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