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Hedge Funds Reduce Net Long Positions in US Crude Oil

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Hedge funds 

Hedge funds’ net long positions in US crude oil futures and options contracts declined by 22,151 or 4.6% to 450,641 on February 6–13, 2018. The net long positions fell for the second consecutive week. US crude oil prices declined 6.6% on February 6–13, 2018. The United States Oil ETF (USO) and the United States 12 Month Oil Fund (USL) dropped 6.5% and 5.8% during this period. These ETFs follow crude oil futures.

Hedge funds could be reducing their long bets on WTI crude oil futures and options contracts due to record US crude oil production. US crude oil prices have declined ~6% since January 26, 2018, due to record US oil production and a rise in US crude oil inventories.

The Energy Select Sector SPDR ETF (XLE) and the iShares U.S. Energy ETF (IYE) have fallen ~12.1% since January 26, 2018. These ETFs have exposure to US oil and gas companies.

Crude oil price forecasts  

A Wall Street Journal survey of investment banks estimates that WTI crude oil prices could average $57 per barrel in 2018. The survey also estimates that Brent crude oil prices could average $61 per barrel in 2018.

A Reuters poll predicts that US crude oil prices could average $58.11 per barrel in 2018 and $57.74 per barrel in 2019. The poll also estimates that Brent crude oil prices could average $62.37 per barrel in 2018 and $61.29 per barrel 2019.

According to the EIA, WTI crude oil prices could average $58.28 per barrel in 2018 and $57.51 per barrel in 2019. Brent crude oil prices could average $62.39 per barrel in 2018 and $61.51 per barrel in 2019.

Ongoing supply cuts and strong demand could be bullish drivers for crude oil prices. However, record US crude oil production could be the bearish driver for oil prices.

Read Crude Oil Production Cuts Could Offset Rising US Oil Supplies and Hedge Funds’ Net Long Positions in US Natural Gas near 2018 High for the latest updates on crude oil and natural gas.

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