Hedge funds dump crude bets

Hedge funds cut bullish bets on Brent crude to the lowest level in three years amid speculation that Saudi Arabia may refrain from paring output to tackle global oversupply.

Speculative bets that prices will rise, in futures and options combined, outnumbered short positions by 36,704 lots in the week to Sept. 30, the London-based ICE Futures Europe exchange said today in its weekly Commitments of Traders report. That’s the lowest since Oct. 4, 2011. The data were delayed from yesterday because of an over-statement of open interest levels which the exchange is investigating, ICE said.

Brent futures declined by 2.3 percent in the period covered by the data, slumping below $95 a barrel on Sept. 30 for the first time in two years amid rebounding supply from Libya. Oil has since extended its loss after Saudi Arabia cut its prices to all destinations, prompting speculation the world’s biggest exporter won’t lead the Organization of Petroleum Exporting Countries in restraining output.

The delayed publication of the Commitments of Traders report, normally released around midday on Mondays, was caused by an overstatement of open interest levels for contracts of Brent crude, Dubai First Line futures, USGC Fuel Oil futures, and WTI crude futures in the period from Sept. 29 to Oct. 6, the exchange said in a circular.

Bearish positions held by producers, merchants, processors and users outnumber their bullish wagers by 282,900 contracts, the data showed. That reduces their net-short for a second week.-Bloomberg