NEW YORK Feb 14 Oil speculators and hedge funds
have rapidly increased their bullish bets on U.S. crude prices
to near the highest ever, data showed on Friday, even as some
analysts say the United States is on the brink of an oil glut.
The speculator group raised its combined futures and options
positions in New York <0#CL:> and London <0#WTCL:> U.S. crude
oil contracts by 26,882 to 364,133 contracts in the week to
February 11, putting them shy of the 387,000 record hit last
The run-up came as oil prices extended a three-week rally
toward $100 a barrel. In the week to Tuesday, U.S. crude oil
rose from $97.19 a barrel to $99.94 a barrel, driven
higher by a sharp demand for heating fuel amid a fierce winter.
Big funds have boosted their net long position by over
80,000 contracts -- equivalent to 80 million barrels, or roughly
$8 billion -- over the past four weeks, one of the most rapid
run-ups in bullish bets since 2011.
The bullish sentiment is emerging despite medium-term
concerns that steadily rising U.S. shale oil production and a
long-standing export ban may create a glut of light, sweet crude
in the United States by year's end.
The positioning may be more tactical than strategic, as new
pipelines help drain crude oil from the Midwest, particularly
the Cushing, Oklahoma, delivery point for futures.
"Extreme weakness in WTI over the rest of Q1 can be ruled
out given the healthy state of overall US domestic oil demand
and the state of product inventories," Barclays said in a
But it warned that prices may pull back soon as Gulf Coast
refiners head into the peak of what is expected to be a larger
than usual maintenance season, reducing demand for crude.
"Over the coming weeks however, we expect the upward
momentum in WTI to slow down if it crosses the $101/bbl level
again, partly from the weight of softening US Gulf Coast
balances," it said.
Despite the bitter cold that has boosted demand for heating
fuel and New York diesel prices, speculators resisted chasing
the market. Net long positions rose by just over 2,000 contracts
to some 29,000 lots, the highest since September but lower than
the peak of past winters.
Ultra-low sulfur diesel (ULSD), commonly known as
heating oil, rose 1.5 percent in the week from Tuesday, Feb. 4
to Tuesday, Feb. 11. That corresponded with a nearly 3 percent
rise in U.S. crude oil prices.
Nor was there a bullish mood for gasoline prices, however.
Net length for RBOB oil futures dipped slightly to 25,603, the
lowest since last June's 23,000 lots.
(Reporting By Elizabeth Dilts and Jonathan Leff; Editing by