最近一周，纽约商品交易所（NYMEX）原油及伦敦Last week, hedge funds flooded the crude oil futures and options market again as bullish sentiment about production restrictions outweighed concerns about already high oil prices.
In the week ended Oct. 19, hedge funds and other fund managers bought the equivalent of 10 million barrels of the six most important futures and options contracts.
Funds have been net buyers for seven of the past eight weeks, with a total increase of 188 million barrels since Aug. 24, according to records compiled by exchanges and regulators.
In the last week, New York Mercantile Exchange (NYMEX) crude oil and London Intercontinental Exchange Inc(ICE) WTI crude futures, US gasoline and European natural gas all bought, but purchases of Brent crude and US heating oil declined.
Most of the increase came from the establishment of new bullish positions, which outnumbered the new bearish positions, suggesting that the fund still expects oil prices to rise further.
Portfolio managers accumulated a net long position of 865 million barrels in all six contracts, with a ratio of long to short positions reaching nearly 7:1.
Among them, intermediate distillate and crude oil lead to increase the long-empty ratio, while the ratio of gasoline is relatively low.
This distribution suggests that distillates are most likely to benefit from strong demand from manufacturing and freight, as well as from fuel conversions caused by record natural gas prices in Europe and Asia this winter.
In addition, it also shows that despite the sharp rise in oil prices, portfolio managers are still optimistic about its upward potential.
Oil prices will rise further before profit-taking
Although monthly Brent crude futures prices have risen more than 22 per cent in the past two months, traders expect producers to continue to limit production to lag consumption growth, further reducing crude oil inventories in the coming months.
In addition, on October 23rd, Saudi Arabia's energy minister warned that oil-producing countries could not take rising oil prices for granted because the epidemic posed a continuing risk to consumption.
The spread between spot Brent crude and six-month futures has risen sharply to a spot premium of more than $5.50 a barrel to the 99th percentile, meaning inventories are expected to fall to extremely low levels.
However, the combination of a rapid rise in spot prices and a sharp rise in spot premiums is in line with the near cyclical peak of the market, which increases the risk of an eventual correction.
At the same time, the pace of new purchases per week is slowing, which may be a reaction to the rise in oil prices, reducing the new momentum driving the rally.
For now, however, most fund managers are still betting on higher oil prices, which are expected to rise further before producers increase production or slide into profit-taking.
