Oil bullishness is at 2019 high as rally shows signs of sticking

Oil optimists pushed bullish wagers to a six-month high as the rally in prices continued.

Money managers raised optimistic wagers on Brent crude for a fifth straight week while closing out pessimistic bets by the most since January as turmoil in major oil-producing nations heightened supply concerns. Short-selling bets on the global benchmark plunged by 18 per cent, according to data released Friday.

Hedge fund positioning on US crude told a similar tale, with contracts calling for a decline in West Texas Intermediate falling off by 17 per cent.

“There’s not many people who are willing to short this market,” said Tyler Richey, co-editor at Sevens Report in Palm Beach Gardens, Florida. “We could be near a market top, but it’s just too early to tell. Right now, the path of least resistance is higher for oil.”

Brent advanced 1.7 per cent this week, bringing its yearly gain to 33 per cent, as fighting in Libya and a coup in Sudan added to uncertainty in a market already tightening because of Opec-led supply cuts. WTI rose for the sixth straight week, the longest run in two years.

The net-long Brent position — the difference between bets on higher prices and wagers on a slide — climbed 2.7 per cent to 358,141 futures and options contracts for the week ended April 9, according to London-based ICE Futures Europe. Long positions rose 0.3 per cent, reaching their highest point since late October.