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Brent Crude Net Longs Trimmed As Short Sellers Get More Confident

ByCommodityOnline
Published 04/10/2012, 06:03 AM
Updated 05/14/2017, 06:45 AM

Money managers reduced their bets on higher Brent and gasoil prices last week. The recent data from the ICE exchange which covers the week ending April 3 shows a 7.8 percent reduction in Brent longs and a 4.4 percent reduction in gas oil. The change in Brent was in line with what was seen in WTI Crude for the same period.
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The reduction in Brent crude longs happened at a time when the price was trading near the high end of its recent range, and as the chart below shows the majority of the net long reduction came from a 17 percent increase in the short position. This could indicate that money managers are increasingly prepared to stick their necks out and become sellers above 125 dollar per barrel, as the risk reward at that level has become skewed to the downside (stop > 127 with take profit).

The combined net long positions of WTI and Brent crude fell to 435.5 million barrels last week. This was the lowest level in nearly two months and occured after several failed attempts to bring the net long position above 500 million barrels.
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