This is the second time in three weeks Hedge Fund have cut their position in petroleum this is the response to a resurgence of coronavirus infections and the likely postponement of a resumption to airlines international passenger flights. Many money managers sold the equivalent of 35 million barrels in the six most important petroleum futures and options contracts in the week to April 6.
The hedge Fund community is still positive about the outlook for oil prices for the remainder of the year: the combined position across all six contracts is in the 75th percentile for all weeks since the start of 2013. The bullish long positions outnumber bearish short ones by a ratio of 5.2:1, which is in the 71st percentile for all weeks over the same period. The Fund managers are less positive in February and March when positions and the long-short ratio peaked in the 81st to 83rd percentiles.
The decision by producer group Petroleum export to start raising crude output from May, as well as indications that U.S. shale production will start to increase from the second quarter, has also prevented bullish sentiment.