After holding some of the most bearish positions of the past decade, investors have ramped up their long bets in crude after prices soared 30 per cent.
After being burnt by crude’s slump in the first half of 2023, hedge funds are rushing back into the oil market with their most bullish wagers in more than a year.
Still, caution remains. Renewed concerns about China’s economy and US monetary policy have hindered crude’s rally. Banks including Goldman Sachs –– maintained their more tempered forecasts. And lingering memories of the first half’s losses may soften funds’ conviction. “The bulls got global recovery wrong,” Ed Morse, global head of commodity research at Citigroup, said in July. “And they were overly optimistic on Chinese demand in particular.”
“Much of the market’s growth pessimism has been abandoned,” Goldman Sachs analyst Daan Struyven said. “And consistent with a reduction in pessimism, positioning has risen pretty significantly.”
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