* Brent net longs down 25 pct as prices fall to 3-month low
* ICE gas oil net longs cut by 20,028 to 34,551
* ICE data confirms extent of fund unwind during price rout
* Brent ICE data graphic: link.reuters.com/jus96s
* Gasoil ICE data graphic: link.reuters.com/puk69t
(Adds graphic link, details)
By David Sheppard
LONDON, July 21 Hedge funds and other large
speculators slashed their bets on higher Brent crude oil prices
by almost 25 percent in the week to July 15, ICE said on Monday,
as prices collapsed to their lowest in three months.
The IntercontinentalExchange Inc. said money
managers reduced their net long futures and options positions in
Brent to 151,981 from 201,568 as prices fell to a
three-month low of $104.39, down from more than $115 a barrel in
Hedge funds have now reduced their Brent bets by almost 40
percent since late June, when they accumulated a record position
as the advance of Islamist insurgents in northern Iraq
threatened to disrupt oil supplies from the OPEC country.
But weak demand in physical markets triggered a rapid 10
percent correction in Brent after no serious oil disruptions
emerged, leaving many funds nursing painful losses.
The move was mirrored in the New York Mercantile Exchange
(NYMEX) U.S crude oil contract, where big speculators closed out
nearly $6 billion worth of bullish bets last week, confirming
the biggest four-week fund exodus on record.
Brent prices for immediate delivery came under additional
pressure last week, with the spot market falling to a steep
discount compared to contracts for delivery in later months - a
market structure known as contango that indicates weak demand.
On Monday Brent was trading just below $107 a barrel, having
risen slightly from last week's lows as tensions increased
between Russia and Western powers over the downing of a
Malaysian passenger plane in Ukraine.
The ICE gas oil contract, which is used for hedging
against and speculating in price moves linked to diesel, jet and
heating fuel, also saw an exodus of funds last week.
Data from ICE showed hedge funds and other large speculators
cut their net long futures and options positions in gas oil by
20,028 to 34,551, a decline of 37 percent.
ICE gas oil has also slipped into contango, encouraging
traders to store diesel and jet fuel until prices recover, with
gas oil stocks in independent storage in the
Antwerp-Rotterdam-Amsterdam hub steadily rising over the past
Gas oil fell to a 13-month low of $871.50 a tonne on July
15, 7 percent below a three-month high of $943.75 in June.
(Reporting by David Sheppard; Editing by David Goodman and