Hedge funds slash bullish bets on U.S. crude to lowest in a year

NEW YORK (Reuters) - Hedge funds slashed their bullish wagers on U.S. crude in the latest week to the lowest level in more than a year, data showed on Friday, as equity markets slid, sparking worries about the energy demand outlook.

The speculator group cut its combined futures and options position in New York and London by 42,644 contracts to 216,733 in the week to Oct. 23, the lowest level since September 2017, the U.S. Commodity Futures Trading Commission said.

The cut came as money managers in NYMEX U.S. crude sent gross long positions tumbling to the lowest level since January 2016.

During the period, U.S. crude and Brent crude prices slumped more than 6 percent on worries about slowing demand growth and as Saudi Arabia said it could supply more crude quickly if needed after U.S. sanctions on Iran’s exports take effect.

Brent crude speculators cut net long positions by 48,333 contracts to 360,785 in the week to Oct. 23, according to data from the Intercontinental Exchange. That was the lowest level in two months.

Stock markets around the world fell on Friday, on track for the longest weekly losing streak since 2013 as anxiety over corporate profits added to fears about global trade and economic growth. [MKTS/GLOB]

Meanwhile, Saudi Energy Minister Khalid al-Falih told a conference in Riyadh that the oil market was in a “good place” and he hoped oil producers would sign a deal in December to extend cooperation to monitor and stabilize the market.

Falih said he would not rule out the possibility that Saudi Arabia would produce between 1 million and 2 million barrels per day more than current levels in the future.

Oil prices had rallied on expectations that global supplies would be disrupted as the U.S. reimposes sanctions on Iran. The sanctions are set to begin on Nov. 4, and Washington has said it wants to stop all of Tehran’s fuel exports, but other oil producers are pumping more to fill any supply gaps.

U.S. crude inventories have climbed for five consecutive weeks. This week, data showed inventories rose by 6.3 million barrels in the week to Oct. 19, topping analyst expectations.

In the last five weeks, overall U.S. crude stocks have risen to 422 million barrels, not including the country’s strategic reserve, which holds about 656 million barrels. [EIA/S]

Natural gas speculators in four major NYMEX, ICE markets trimmed net long positions by 1,593 contracts to 272,836 in the week to Oct. 23.

Net long positions in U.S. gasoline fell to the lowest level since December 2017, at 73,153 contracts, the data showed, as prices fell more than 7 percent and hit their lowest since February. Speculators also cut their net long positions in U.S. heating oil to the lowest since mid-July.

Reporting by Devika Krishna Kumar in New York; Editing by David Gregorio and Leslie Adler