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OPEC's Exit Strategy and Saudi Arabia's Crude Oil Export Plans

PART:
1 2 3 4 5
Part 5
OPEC's Exit Strategy and Saudi Arabia's Crude Oil Export Plans PART 5 OF 5

Hedge Funds Raised Bullish Bets on US Crude Oil

Hedge funds 

The U.S. Commodity Futures Trading Commission released its weekly Commitments of Traders report on May 26, 2017. Hedge funds increased their net long positions in US crude oil futures and options for the first time in the last five weeks. Hedge funds’ net long positions in US crude oil futures and options rose by 31,849 contracts to 193,143 contracts in the week ending May 23, 2017—compared to the previous week.

Hedge funds increased their net long positions ahead of OPEC’s meeting on May 25, 2017. It suggests that they’re bullish on oil prices after the production cut deal extension. For more on the deal and prices, read the Part 1 of this series.

Hedge Funds Raised Bullish Bets on US Crude Oil

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Crude oil price forecasts  

J.P. Morgan revised its crude oil prices forecasts after OPEC’s epic meeting on May 25, 2017. It thinks that US crude oil prices could average $52.2 per barrel in 2017 and $42 per barrel in 2018. J.P. Morgan added that Brent crude oil prices could average $55.2 per barrel in 2017 and $45 per barrel in 2018. US and Brent crude oil prices averaged $43.3 and $43.7 per barrel in 2016, respectively.

J.P. Morgan thinks that the rise in US crude oil production could offset reduced production from the production cut deal. Volatility in crude oil (IEZ) (RYE) (XLE) prices impacts oil and gas producers’ earnings like Warren Resources (WRES), QEP Resources (QEP), Apache (APA), and ConocoPhillips (COP).

Read Will Crude Oil Prices Test 3 Digits Again? and Are Hedge Funds Turning Bearish on Crude Oil? for more information on crude oil price forecasts.

Read Trader’s Game Plan: OPEC’s Epic Meeting, Fed, and US Supplies for more on crude oil prices.

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