Hedge funds boost bullish U.S. crude oil bets fourth week in a row

NEW YORK (Reuters) - Hedge funds rushed to place bullish wagers on U.S. crude oil for the fourth week in a row, government data showed on Friday, as prices rallied on expectations that an output cut by top producers would balance the market in the year ahead.

Money managers raised their combined futures and options position in two major NYMEX and ICE markets by 8,494 contracts to 341,834 in the week to Dec. 27, a fresh high since July 2014, U.S. Commodity Futures Trading Commission (CFTC) data showed.

U.S. oil futures on the New York Mercantile Exchange rose about 3 percent and averaged $52.92 per barrel during the five trading days ended Dec. 27.

Members of the Organization of the Petroleum Exporting Countries (OPEC), which accounts for a third of global oil supply, agreed late in November to cut production from January by around 1.2 million barrels per day (bpd), or over 3 percent, to 32.5 million bpd.

Several non-OPEC members also joined in, pledging to cut output, in the first global oil pact since 2001.

In a sign that the world’s oil major producers may abide by their agreement, Venezuela, one of the members of the oil cartel group, said this week it would cut 95,000 barrels per day of oil production in 2017.

Oil prices settled slightly lower on Friday, the year’s last trading day, but racked up their biggest annual gain since 2009. [O/R]

A committee of OPEC and non-OPEC producers will meet in Vienna on Jan. 21-22 to discuss compliance with the oil production agreement, Kuwaiti oil minister Essam Al-Marzouq told state news agency KUNA earlier this week.

In the United States, crude oil stocks unexpectedly rose last week as imports fell.

Crude inventories were up 614,000 barrels in the week to Dec. 23, compared with expectations for a decrease of 2.1 million barrels.

Speculators raised their bullish bets in gasoline to the highest since February 2015, with a combined futures and options net long position of 50,091 contracts in the week to Dec. 27.

The group also boosted bullish bets on ULSD to the highest since July 2014 as demand picks up with forecasts for a colder winter.

Gasoline and distillate product inventories dropped last week, U.S. Energy Information Administration data showed, as refinery crude runs fell.

Reporting by Devika Krishna Kumar in New York; Editing by Richard Chang