Wall Street is gearing up for a red hot Q4 and plans on using oil as a key investment position for their customers. Many of our clients are also feeling the heat as the competition for top talent continues to increase.
If your team is looking to scale and get ahead of the talent wave that’s coming, reach out to us at True North Talent Group, LLC. We’d love to talk some shop and help with resource planning as we wrap up 2019.
From OilPrice.com, July 23, 2019:
Hedge Funds Unexpectedly Set The Stage For An Oil Rally
As market participants continue to weigh two decisively bearish factors for oil prices—slowing oil demand growth and soaring non-OPEC oil supply—two potentially bullish drivers have made money managers return to buying oil in recent weeks.
The possibility of a Fed rate cut as soon as next week and the flaring-up of the Iran-West tensions in the Middle East and the world’s most important oil shipping lane, the Strait of Hormuz, resulted in hedge funds buying petroleum futures at the fastest pace in nearly a year in the most recent reporting week, according to exchange data compiled by Reuters market analyst John Kemp.
Despite the jump in bets on rising oil prices, the current overall positioning of hedge funds and other money managers points to a further upside for oil prices as the ratio of longs to shorts is still way off the highs in April 2019 and September 2018 that were followed by hefty sell-offs. Shorts are still relatively high and could prompt another short covering, while longs are not as high as earlier this year, suggesting that there is room for further buying, Kemp argues.
In the week to July 16, portfolio managers boosted their net long position—the difference between bullish and bearish bets—in the six most important oil contracts by the equivalent of 84 million barrels, to a total of 647 million barrels. Bets on rising prices, long positions, jumped by 76 million barrels, while shorts decreased by 8 million barrels in the latest reporting week, according to exchange data analyzed by Kemp.
The 84-million-barrel addition to the net long position in the six petroleum contracts was the largest weekly increase in bets on rising prices since August 2018.
The ratio of longs to shorts in WTI Crude and Brent Crude increased to 4.33 in the week to July 16, up from 3.82 in the previous week and a recent low of 3.64 on June 18.