Hedge funds made a record number of bets on falling oil

Hedge funds increased bets on lower prices of WTI crude oil to a record 2006 level after prices fell to three-month low, says Bloomberg, citing data from the Commission on trade in commodity futures.

According to the Commission, for the week ended 2 August, the hedge funds increased their short positions in futures and options on WTI crude oil to 218,623 thousand This is a record figure in the history of this data collection, which began in 2006.

The price began to fall in the second half of July. At the close of trading on 1 August, the WTI crude oil compared to the July peak, was 22% lower, showing the return of the oil market in bearish cycle. For the week ended 2 August, the barrel of WTI fell by 7.9%, to $39,51.

According to the energy information Administration of the United States, as of July 29, crude oil inventories in the US rose to 522,5 million barrels. This is the highest seasonal level for the last decade, says Bloomberg. Imports rose by 8.74 million barrels per day to the highest level since October 2012.

In early August, interviewed by The Wall Street Journal 13 analysts investment banks lowered forecasts on oil prices of Brent and WTI in 2017 by about $1. They calculated that the average cost of a barrel of Brent in the next year will be $56, and the barrel of WTI is $55. According to the publication, one of the main reasons for the decline in oil prices is a surplus of gasoline on a global scale, as refineries took advantage of lower prices in the last two years actively purchased raw materials.

According at 11.02 GMT, futures for Brent crude on the ICE futures exchange was up just over 1% and was trading at $44,75 per barrel. Cost of oil WTI at the auctions in new York grew by 1.2%, to $42,3 per barrel.