Hedge funds loaded up on the most bearish bets against Brent crude since October as the market braced for a fresh injection of OPEC+ supply. Money managers upped their short-only bets on Brent by 16,922 lots to 130,019 lots in the week ended May 27, the most in eight months, according to figures from ICE Futures Europe. At the same time, short-only bets against West Texas Intermediate rose to a three-week high, data from the Commodity Futures Trading Commission show.
Oil slipped last week as the prospect of another major OPEC+ production hike raised concerns about a supply glut. A sub-group led by Saudi Arabia is set to meet on Saturday to decide on July output levels, following preliminary talks last week on a third consecutive supply increase. Adding to headwinds, investors’ assessed some optimistic signals out of Washington on a nuclear deal between the US and Iran. Relaxed sanctions on the OPEC member stand to boost supplies, hurting prices. Short-only bets against gasoline also rose to a four-week high even with the summer driving season underway, data from the Commodity Futures Trading Commission show.
OPEC+ agrees to boost output by 411K bpd in July as expected and priced
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, agreed during a video call on Saturday to boost production by 411,000 barrels per day in July, energy journalist Amena Bakr reported. The output increase will be implemented for the third month in a row by eight key nations, including Saudi Arabia and Russia, after they earlier agreed to make the same moves in May and June. The group will hold its next meeting on July 6, when 8it is set to decide on its policy for August.