Bullish Bets on Oil Increase

Hedge funds and other money managers’ bets on Brent crude were the most bullish since July just days before prices rallied to a two-month high.

Money managers’ net wagers on rising prices rose 13 percent to 158,974 contracts in the week ended Feb. 10, the highest since the early days of last year’s oil slump on July 8, according to figures from the London-based ICE Futures Europe exchange. The change was driven by a reduction in bearish positions, rather than fresh bullish bets, signaling traders remain cautious that the price recovery will endure, according to Saxo Bank A/S.

Brent futures have climbed 9 percent since the period covered by the report amid speculation that production growth in the U.S. will slow. In response to the plunge in oil prices, which remain at about half their peak last year, drillers in the U.S. idled 33 percent of their rigs in the last 10 weeks, according to Baker Hughes Inc.

Bloomberg

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