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Analyzing Hedge Funds’ Net Long Position on US Crude Oil

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Hedge funds 

On July 7, 2017, the U.S. Commodity Futures Trading Commission released its weekly “Commitments of Traders” report. It showed that hedge funds increased their net long positions in US crude oil futures and options by 16,345 contracts or 12% to 149,951 contracts on June 27–July 4, 2017. Hedge funds’ net long position on US crude oil rose for the first time in four weeks. It suggests that hedge funds are turning bullish on crude oil (ERY) (ERX) (IXC).

Moves in crude oil prices impact oil and gas producers’ earnings like Swift Energy (SFY), Continental Resources (CLR), Apache (APA), and Comstock Resources (CRK).

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Crude oil price forecasts 

BNP Paribas estimates that WTI (West Texas Intermediate) crude oil prices will average $49 per barrel in 2017—$8 per barrel lower than previous estimates. BNP Paribas also estimates that Brent crude oil prices will average $51 per barrel in 2017—$9 per barrel lower than previous estimates.

Barron’s estimates that Brent crude oil prices could hit $60 per barrel by the end of 2017. OPEC’s production cut deal and improving global oil demand could drive crude oil prices higher.

The latest forecasts from Goldman Sachs estimate that US crude oil prices could average $47.50 per barrel in the next three months. WTI and Brent crude oil prices averaged $43.3 per barrel and $43.7 per barrel, respectively, in 2016.

Read Is It Time for US Crude Oil to Test $40 per Barrel?  and Will OPEC and Russia Pressure US and Brent Crude Oil Futures? to learn more about crude oil.

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