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Ole Hansen
Ole Hansen, Saxo Bank's Head of Commodity Strategy, was shocked by the meteoric decline in oil over the past year, as were most analysts. Prices have since stabilised around USD 60 from the January 2015 low of USD 44.80. Ole isn't convinced that the recent rebound constitutes a rally as three risk factors remain: ISS militants in the Middle East, global oversupplies, and inflated bullish demand expectations.
Article / 13 January 2014 at 12:12 GMT

Brent Crude net-longs cut by 26.7 percent last week

Head of Commodity Strategy / Saxo Bank
Denmark

By Ole Hansen

Hedge Funds and other large money managers cut their net-long exposure to Brent crude oil by 36,515 contracts of futures and options during the week of January 7. This was the biggest weekly reduction since May 2012 and it occurred in response to the continued weakness seen since December 27. Gas oil net-longs were cut by 38 percent. 

As the table below shows, the significant reduction in Brent crude longs was driven by cuts in gross longs and the addition of gross short positions.

Speculative positioning in Brent Crude and Gas oil

Brent Crude speculative positioning
Source: Ice Exchange, Bloomberg and Saxo Bank

Gas Oil Speculative positioning

Source: Ice Exchange, Bloomberg and Saxo Bank

 

(xcma)

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