Hedge funds’ net long position in WTI crude oil (UCO) futures and options contracts rose 2.9% to 496,111 for the week ending January 23, 2018—the highest level since 2006.
Hedge funds’ net long position in Brent (BNO) oil futures and options contracts rose 2.4% to a record high of 584,707 for the week ending January 23, 2018. The increase suggests that hedge funds are bullish on crude oil (UWT) (DWT) prices.
Hedge funds are bullish on oil due to production cuts and strong oil demand. Crude oil prices are near a three-year high. Higher oil prices favor energy producers (XOP) (VDE) like Northern Oil & Gas (NOG), ExxonMobil (XOM), and Contango Oil & Gas (MCF).
Crude oil price forecasts
BBL Commodities is one of the biggest oil hedge funds in the world. BBL Commodities forecast that Brent crude oil prices could hit $80 per barrel in 2018. Prices could rise due to the drop in OECD crude oil inventories.
JPMorgan Chase predicts that Brent crude oil prices could average $70 per barrel in 2018. JPMorgan Chase also expects that WTI crude oil prices could average $65.63 per barrel in 2018.
Goldman Sachs estimates that Brent and WTI crude oil (SCO) prices could average $62 and $57.5 per barrel in 2018. Société Générale estimates that Brent and WTI crude oil (DWT) prices could average $62 and $57.75 per barrel during the same period.
However, a rise in the US and non-OPEC crude oil production in 2018 could pressure crude oil prices.
Read Top 5 Drivers for Crude Oil Prices in 2018 for updates on crude oil.