The FINANCIAL — The number of speculators in the oil market betting on higher Brent prices fell in the week ending April 24 as traders struck a cautious note following a week of choppy trading largely driven by macro-economic sentiment.
Money managers, including hedge funds, cut their net long position by 8,968 to 113,916 contracts last week, according to the IntercontinentalExchange Inc.'s (ICE) weekly Commitment of Traders report published Monday.
According to Borsa Italiana – London Stock Exchange Group, in the U.S., the Commodity Futures Trading Commission also reported a drop in net long positions held by speculators in the same period.
The net long position is the difference between the number of long positions, or bets that prices will rise, and short positions, or bets that prices will fall.
However, despite the slight negative turn in sentiment, the majority of speculators continue to bet on higher prices.
"We believe this optimism is misplaced in view of the considerable oversupply, very high and still rising U.S. inventories, easing geopolitical tensions, and still smoldering sovereign-debt crisis in the euro zone," said Commerzbank in a note, adding that it anticipated that the oil price would come under more pressure.
Elsewhere, speculators raised their net long positions in gasoil by 9,516 to 73,062, the ICE's data show.
ICE publishes the reports each week at 1100 GMT Mondays with data for the previous Tuesday.
The reports contain the same four categories of market participants used by the U.S. Commodity Futures Trading Commission: producers, swap dealers, managed money and other reportables.
ICE Futures Europe's COT reports include futures-only and futures-and-options-combined data, as well as open interest concentration among the contracts' largest traders.