Hedge Funds Hike Bullish Oil Bets

Hedge funds turned the most bullish on Brent crude since early April as traders hedged against the risk of a military conflict between the US and Iran and potential supply disruptions from the OPEC member. Money managers increased their net-long stance on Brent crude by 31,332 lots to 278,249 lots in the week ended Feb. 3, the highest in nearly 10 months, data from ICE Futures Europe show. Bullish bets on US West Texas Intermediate oil also rose to a six-month high, according to the Commodity Futures Trading Commission. Persistent tensions between the US and Iran have driven investors to raise bullish bets on both benchmarks for four consecutive weeks. The two countries appeared to square off at sea and in the air on Tuesday, reviving a risk premium that eventually ebbed as plans for nuclear talks took shape.

The sustained bullishness was also reflected deeper within the options market and beyond. WTI bullish call options settled at their biggest premium to bearish puts since 2022 at one point this week, while a major oil-linked exchange-traded product saw its biggest inflow since 2020.

NN: As you may recall we informed you of the record hedge fund shorts in December. And we had you double down on the $58.39 low. And we have enjoyed a $10.00 rally since then. In fact Unit 1 cash machine is now in small profits. I am sitting here looking forward to $100.00 as the Ayatollah and the Red murderers are sent to their 62 virgins.