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OPEC+ Production Plan Sparks Record Hedge Fund Oil Sales: Reuters

OIL

Portfolio investors sold record volumes of oil paper contracts last week after OPEC+ made a surprise announcement to increase production from Q4, according to Reuters.

  • Hedge fund managers sold the equivalent of 194m bbl in the six most important oil futures and options contracts over the seven days to June 4.
  • This is the fastest of any week since at least 2013 and were over three standard deviations away from the average change.
  • Total petroleum positions fell to 208m bbl, the lowest since a single week in Dec. 2023, and before that Jan. 2016.
  • Reuters said that the heavy selling of product contracts implies that investors are cautious to signs of tepid demand and high inventories.
  • Brent was down 102m bbl, Nymex and ICE WTI down 53m bbl, European Gasoil down 17m bbl, US diesel down 15m bbl, US gasoline down 6m bbl.

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