Speculators hike net-long positions in Brent

Money managers and hedge funds have increased their net-long bets on ICE Brent futures over the past week, with speculators purchasing more than 11,000 lots, raising net-long positions in Brent futures to almost 252,000 lots. The rise in net-long positions marks the second consecutive week of growth, driven by short bets being liquidated rather than new long buying, according to data from ICE Futures Europe.

Gross-long positions in Brent futures rose by around 9,000 lots during the week. The increase in net-long bets comes amid fading hopes of a diplomatic breakthrough between the US and Iran, which keeps commercial navigation through the Strait of Hormuz constrained. Brent crude is caught between persistent attacks on vital energy infrastructure and dwindling expectations for a US-Iran diplomatic resolution.

When speculators boost net-long positions, oil prices often rise; conversely, reducing these positions typically leads to declining oil prices. This cycle can establish a feedback loop where their actions impact oil prices and the market.