Hedge funds and other money managers raised their bullish bets on Brent crude for a third week by 12,484 contracts to 121,700 contracts during the week ending February 18, according to the ICE Futures Europe. Despite the rally seen during the past month, the net-length is still only half of the record that was seen last August and it indicates how the bullish sentiment in the market has been skewed heavily towards WTI crude during the current period of raised demand in the US due to the cold weather.
The speculative position in Brent crude remains around half of what it was when it peaked last August when Libyan exports began to dry out and the US was going through a period of raised demand. Those holding short (red area) have not been persuaded to reduce exposure despite the recent return to USD 110/barrel.
Comparing this with WTI crude where the net-long position has almost returned to the record highs reached last August, we see a clear preference for WTI at the moment. Either as an outright bullish bet or as a long WTI crude position against a short Brent crude position.
Gas oil rose for third week, this time by 21 percent.
Ole Hansen is one of the industry's foremost commentators on commodities. You can see all of Ole's commentary here on our social trading platform.