Behind the façade of calm oil markets, a gradual build-up in speculative positions could be undermining future prices of Brent or WTI as both benchmarks remain on their longest runs below their 100-day moving average in more than a year. Open interest held in ICE Brent is now the highest in history – 5.5 million contracts as of this week – however investors hold more Dec 2026 contracts than any other month except for the prompt two, February and March, suggesting that the market wants to hedge itself against oversupply next year. Hedge funds have been raising their short positions on crude for the past two months, with ICE Brent now
posting the highest outright number of shorts on record (174,703 contracts in the week ending December 2).
Oil prices continue to search for direction as a supply scare from Iraq turned out to be short-lived, with most market speculation centred around Ukraine peace talks and US Federal Reserve policy. With ICE Brent still hovering around $63 per barrel, the Fed’s last gathering in 2025 could provide some temporary upside to prices, however it is unlikely to fundamentally break the current stalemate.