Hedge Funds Crude Oil Futures
Hedge Funds Increase Bets on Crude Oil to 4-Year High
Hedge funds have increased bullish bets on the price of crude oil to a level not seen for more than four years. The bets on the rising price of oil stems from the expectation that as the United States' economy continues to improve following the recession then demand for oil will increase.
The funds and other large speculators increased net-long positions, or wagers on rising prices, by 4.6 percent in the seven days ended Dec. 28, according to the Commodity Futures Trading Commission’s weekly Commitments of Traders report. It was the top total in records going back to June 2006.
The wagers gained on signs that demand will advance as the U.S. economy improves. Analysts have forecast that prices may top $100 a barrel for the first time since the beginning of the financial crisis in September 2008. Global oil use will increase 1.7 percent to a record 87.8 million barrels a day this year, according to the U.S. Energy Department.
“There’s this feeling that the economy is going to get stronger, that the economic recovery is taking root, and that we’re going to see things get better,” said Peter Beutel, president of trading advisory company Cameron Hanover Inc. in New Canaan, Connecticut. Source
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