Hedge funds cut Brent crude net-long as WTI premium narrows

Hedge funds and other money managers cut their net-long exposure to Brent crude oil by 6,454 contracts to 143,582 during the week ending January 15, according to data from the ICE Europe Exchange. This reduction of bullish bets was the first in two months and occurred during a week where the price came under some pressure while the spread to WTI crude oil contracted to its narrowest in almost four months.

Both the gross long and short positions increased but gross short did so to a stronger degree. This could indicate some naked selling of Brent crude against WTI crude in anticipation of further spread contraction as the expanded Seaway pipeline from Cushing to the Mexican Gold became operable.  Gas oil net-long position meanwhile rose for a third consecutive week.