[NEW YORK] Hedge funds cut their bearish position on Brent crude by the most on record after the US imposed sanctions on Russia’s biggest oil companies, threatening exports from the Opec+ producer just as the market was adjusting to the reality of oversupply.
Money managers decreased short-only bets on the global benchmark by 62,078 lots to 135,790 lots in the week ended Oct 28, according to figures from ICE Futures Europe.
The breakneck shift in sentiment comes after the US blacklisted Russian oil giants Rosneft oil and Lukoil to stave off revenue the Kremlin needs for its war in Ukraine. Traders are honing in on next moves by India and China, top buyers of Moscow’s supplies, for clues on impacts of the sanctions to global balances.
The sanctions come at a time when global supply looks plentiful, which contributed to previous bearishness. Nations inside and outside the Opec+ producer alliance have been ramping up output even though there are signs of cooling demand growth.
A US government shutdown has halted weekly reports on US oil positioning. BLOOMBERG