May 11, 2018 / 9:02 PM / in 7 months

Hedge funds cut bullish wagers on U.S. crude to near five-month low

NEW YORK (Reuters) - Hedge funds and money mangers slashed their bullish wagers on U.S. crude in the latest week to the lowest level in nearly five months, data showed on Friday, in the lead-up to U.S. President Donald Trump’s decision to pull out of the Iran nuclear pact.

FILE PHOTO: Oil rig pumpjacks, also known as thirsty birds, extract crude from the Wilmington Field oil deposits area where Tidelands Oil Production Company operates near Long Beach, California July 30, 2013. REUTERS/David McNew/File Photo

The speculator group cut its combined futures and options position in New York and London by 8,831 contracts to 435,230 in the week to May 8, the U.S. Commodity Futures Trading Commission (CFTC) said. That was the lowest level since the week to Dec. 19.

Gross long positions in futures and options on the New York Mercantile Exchange among money managers fell to the lowest level since January while short positions fell to the lowest since late March.

Net long positioning in ICE Brent crude futures and options fell by 22,009 contracts to 569,448 contracts, the lowest level since March 20.

During the week through May 8, oil prices climbed about 2.5 percent and U.S. crude futures pierced the $70 mark for the first time since late 2014.

Prices had been supported for weeks on expectations the United States would pull out of the Iran nuclear deal and reimpose sanctions that could potentially dent global supplies and feed geopolitical tensions in the Middle East, home to a third of the world’s daily oil supply.

On Tuesday, Trump confirmed the United States will withdraw from the deal with Iran to curb its nuclear program and said it will institute the “highest level” of sanctions on Iran. Prices tumbled more than 4 percent in volatile trade amid a flurry of headlines before the official announcement.

Iran re-emerged as a major oil exporter in 2016 after international sanctions against it were lifted in return for the nuclear curbs.

Signs of further disputes in OPEC-member Venezuela also supported prices. U.S. oil major ConocoPhillips moved to take Caribbean assets of Venezuela’s state-run PDVSA to enforce a $2 billion arbitration award.

Among refined products, net long positions in U.S. gasoline futures and options rose to a record, based on data going back to 2006.

Meanwhile, U.S. natural gas speculators in four major New York Mercantile Exchange and Intercontinental Exchange markets cut their bullish bets by 45,094 contracts to 136,853 in the week to May 8, the data showed. That was the lowest level since early January.

Reporting by Devika Krishna Kumar in New York; Editing by Tom Brown and Leslie Adler

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