From the Financial Times:
Hedge funds have placed one of their largest ever bets on a rally in oil prices, just as evidence mounts that energy companies are hunkering down for a delayed recovery.Exchange data show hedge funds and other large speculators have accumulated a record-breaking number of North Sea Brent futures and options contracts equal to almost 265m barrels of oil — the equivalent of almost three days of global oil demand.
At the same time, oil producers and other physical market players have rushed to lock-in prices, selling forward more than half a billion Brent barrels in a bid to protect against future price falls. It is the highest level since the Intercontinental Exchange (ICE) started publishing position data in early 2011.
The split was clear this week at two major conferences on opposite sides of the Atlantic. Hedge fund managers, bankers and trading houses at the FT Commodities Global Summit in Lausanne, Switzerland, were largely of the view that oil prices have bottomed. Brent hit a 2015 high above $65 a barrel on Thursday, having slumped to a five-year low near $45 a barrel in January.“We see the supply side falling away very quickly here,” Paul Horsnell, head of commodities research at Standard Chartered, told the FT Summit. Mr Horsnell forecasts Brent could rise above $80 a barrel in the third quarter of this year.....MORE
