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Hedge Funds Reduced Net Long Positions in Crude Oil

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Hedge funds 

Hedge funds’ net long positions in US crude oil futures and options contracts declined 1.4% to 444,370 on February 13–20, 2018. The net long positions fell for the fourth straight week. Hedge funds could be reducing their long positions in WTI crude oil futures and options contracts due to near-record US oil production. US crude oil prices have declined 4.7% since January 26, 2018, partly due to near-record US production.

The Energy Select Sector SPDR ETF (XLE) and the Vanguard Energy ETF (VDE) have declined ~12% since January 26, 2018. These funds have exposure to US oil and gas companies.

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Crude oil price forecasts  

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

A Reuters poll estimates 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.

US and Brent crude oil prices averaged $50.79 per barrel and $54.15 per barrel in 2017. The EIA estimates that US 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 crude oil demand could support oil prices in 2018. However, record US crude oil production could pressure crude oil prices in 2018.

Read Crude Oil Futures Could Breach 3-Year Highs and Hedge Funds: Downside Risk in US Natural Gas Futures? for the latest updates on oil and gas.

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