But bullishness in Brent cannot completely conceal the increasing staleness of long positions
in the rest of the rest of the petroleum complex, as prices fail to rise further and the end of year approaches.
Since the start of the year, hedge funds have added almost 195mn barrels of additional long positions
in Brent and WTI, while cutting short positions by 235mn.
The COTR report shows that new long positions
have been recorded, while short positions have also seen small increases (end of business Tuesday, September 18).
Thus, even though the long position
was originally purchased in 1995, the constructive sale would treat the long position
as being purchased on Jan.
The hedge funds' net long position
in crude is the smallest since the end of February when Brent was trading around $33 and WTI at $32 per barrel.
Just as the accumulation of a large net long position
helped propel prices higher sharply higher between January and May, the subsequent liquidation of part of that position has seen the rally stall and then go into reverse.
The one-week reduction in the net long position
was the largest since July 2014, according to an analysis of data published by the US Commodity Futures Trading Commission and the Intercontinental Exchange.
It is likely that the net long position
has already fallen further, since the data refer to positions at the end of trading on July 21, and oil prices continued to fall throughout the rest of the week.
That means taking both short and long positions
on stocks and bonds (including high-yield issues), as well as diversifying into mortgage-backed securities, distressed securities, convertible arbitrage (buying a convertible security and selling short the underlying common stock) and other financial instruments.
Hedge funds increased their bullish long positions
in crude oil by the most for over two months in the week ending on Aug.
The Commitment of Traders Report (COTR) for the week ending Tuesday, 29th May 2012, shows a small reduction of long positions
, and a significant reduction of short positions.
The signals are designed for long positions
or short positions.