New York: Oil is on its longest bull run in 13 years, fuelling a rally that has US President Donald Trump fretting about higher prices.
Hedge funds have increased bullish sentiment on US crude prices for the last nine weeks, the longest such run since 2006, according to data released Friday.
Almost 14 times as many bets have been placed on prices going up as on a decline, as investors see supply threats multiplying around the globe.
Gasoline prices have risen in tandem this year, and Trump on Friday said that he has pressured Opec to boost output to reverse the trend.
That helped stall a rally that drove oil to a six-month high, partly due to tightened US sanctions against Iran.
Correction
But the ebullient tilt in speculative wagers suggested a correction was likely no matter what, said Phil Flynn of Price Futures Group Inc.
“The market is so bulled up right now,” said Flynn, a senior market analyst. “There’s been a lot of hedge fund buying, a lot of speculative interest, and we probably need to hit the pause button for now.’
West Texas Intermediate crude sank 2.9 per cent to $63.30 on Friday, capping its first weekly loss in two months. Brent, the international benchmark price, lost 3 per cent.
The net-long WTI position — the difference between bets on higher prices and wagers on a drop — rose 3.6 per cent to 314,387 futures and options contracts in the week ending April 23, the US Commodity Futures Trading Commission said.
Long positions edged up 1.7 per cent, while shorts declined 18 per cent.
