Funds Made Big Hike in Bullish Oil Bets Before Rout

Date: Monday, May 7, 2012
Author: Reuters

Hedge funds and big speculators boosted their bullish bets on U.S. crude oil price by the most since October in the week to May 1, just before the steepest fall in crude this year, regulatory data showed on Friday [May 4].

Money managers raised their net long futures and options positions in the major U.S. crude oil contracts by 24,842 contracts, to 235,400, during the period, the U.S. Commodity Futures Trading Commission said on Friday. It was the biggest one-week rise in net length since late October and pushed speculative positions to the largest in five weeks.

Hedge funds and other large investors boosted their net long U.S crude position on the New York Mercantile Exchange by 23,390 contracts to 219,817, while on the ICE Exchange's lookalike U.S. oil contract in London they were up 1,170 to 12,879 contracts.

During the week to Tuesday [May 1], U.S. crude oil prices rose 2.5 percent to a more than one-month high.

But the market has tumbled over the past three days, diving 7 percent in the biggest such drop since early October.