Column: Hedge funds anticipate oil price spike, possible recession: Kemp | Reuters
Oil traders are anticipating a sharp spike in prices that will likely bring on a business cycle slowdown after Russia’s invasion of Ukraine was met by severe sanctions that are disrupting the country’s petroleum exports.
Hedge funds and other money managers purchased the equivalent of 16 million barrels in the six most important petroleum futures and options contracts in the week to March 1, according to exchange and regulatory data.
Portfolio managers remain strongly bullish towards petroleum, with a net long position of 731 million barrels, which lies in the 65th percentile for all weeks since 2013 (https://tmsnrt.rs/3hH1BJv).
Bullish long positions outnumber bearish short ones by a ratio of almost 7:1, in the 84th percentile, but the overall position has not changed much since the middle of January.
Last week’s position changes were driven primarily by the reduction of previous bearish short positions (-20 million barrels) rather than creation of new bullish long ones (-4 million barrels).
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