Oil Dumped By Hedge Funds On Soaring Recession Risk BY Zero...

Oil Dumped By Hedge Funds On Soaring Recession Risk

BY Zero Hedge
TUESDAY, JUL 12, 2022 - 05:45 AM
By John Kemp, senior market analyst

Investors dumped petroleum-related derivatives last week at one of the fastest rates of the pandemic era as recession fears intensified.
Hedge funds and other money managers sold the equivalent of 110 million barrels in the six most important petroleum-related futures and options contracts in the week to July 5.



Fund managers have now sold a total of 201 million barrels in the past four weeks, according to position records published by ICE Futures Europe and the U.S. Commodity Futures Trading Commission.

The combined position has fallen to only 445 million barrels (in only the 22nd percentile for all weeks since 2013) down from a recent high of 761 million in early January (71st percentile).

Most of the adjustment last week came from the liquidation of previous bullish long positions (-71 million barrels) rather than the creation of new bearish short ones (+39 million).

The hedge fund sector's bullish bias has evaporated, with long positions outnumbering short ones by a ratio of 3.82:1 (44th percentile) down from 6.68:1 as recently as four weeks ago (83rd percentile).