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Hedge Funds Reduce Net Long Positions in WTI Crude Oil

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Hedge funds  

Hedge funds’ net long position in WTI crude oil futures and options contracts trading in NYMEX and ICE decreased by 3,275 to 441,634 on April 3–10, 2018. The net long positions fell for the second straight week.

US crude oil futures increased ~3.2% on April 3–10, 2018. Prices increased partly due to geopolitical tension in the Middle East. The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) and the Energy Select Sector SPDR ETF (XLE) increased ~4.5% and ~3.6%, respectively, on April 3–10, 2018. XOP aims to track the performance of the S&P Oil & Gas Exploration & Production Select Industry Index, while XLE aims to follow the performance of the Energy Select Sector Index.

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Crude oil price forecasts 

WTI and Brent oil prices averaged $50.79 per barrel and $54.15 per barrel in 2017. The EIA estimates that WTI oil prices could average $59.37 per barrel in 2018 and $58.68 per barrel in 2019. Brent oil prices could average $63.36 per barrel in 2018 and $62.58 per barrel in 2019, according to the EIA.

A Reuters survey estimates that WTI and Brent crude oil prices could average $58.88 per barrel and $63 per barrel in 2018.

Wall Street Journal survey of investment banks estimates that WTI and Brent crude oil prices could average $59 per barrel and $63 per barrel in 2018.

Record US crude oil production could pressure oil prices in 2018. However, ongoing production cuts and strong demand could support oil prices in 2018. 

Read Easing Tensions in the Middle East Impact Crude Oil Futures and Key Fundamental Catalysts for US Natural Gas Traders for the latest updates on crude oil and natural gas.

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