Hedge funds reduced their bets on rising West Texas Intermediate crude prices by the most in almost nine months as U.S. inventories climbed and concern eased that sanctions against Russia will disrupt oil supplies.
Money managers cut net-long positions by 25,775 futures and options combined in the week ended March 18, U.S. Commodity Futures Trading Commission data show. It was the biggest drop since June. Long positions slumped 6.6 percent after reaching a record earlier in the month. Shorts increased 7.6 percent.
Crude supplies advanced for a ninth week in the seven days ended March 14 to a three-month high as production increased to the most in 26 years and refineries processed the least oil since October. The U.S. and European Union announced sanctions after voters in Crimea chose to leave Ukraine and become part of Russia, the world’s biggest energy exporter.
“Market players are stepping back and the record longs continue to be shed,” said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy. “Overall inventories have increased a lot as refineries are doing maintenance.”
Crude dropped 33 cents to $99.70 on the New York Mercantile Exchange in the period covered by the CFTC report. It ended below $100 in each of the five days and slid to $97.99 on March 12, the lowest settlement since Feb. 6.
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