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UPDATE 2-Hedge funds turn most bullish on U.S. crude in over two years
October 14, 2016 / 8:31 PM / 10 months ago

UPDATE 2-Hedge funds turn most bullish on U.S. crude in over two years

(Adds comments, details, gasoline positioning)
    NEW YORK, Oct 14 (Reuters) - Hedge funds boosted their
bullish bets on U.S. crude oil for the third week in a row to a
more than two-year high, data showed on Friday, as non-OPEC
countries raised expectations of a joint effort with OPEC
members to cut output.
    Money managers raised their net long U.S. crude futures and
options positions in the week to Oct. 11 to the highest since
late July 2014, just after the two-year price rout began, U.S.
Commodity Futures Trading Commission (CFTC) data showed.
    The speculator group raised its combined futures and options
position in New York and London by 38,690 contracts to 292,083
during the period.
    Oil prices during the time jumped more than 4 percent
and Brent crude hit a one-year high on Oct. 10 after
Russia said it was ready to join OPEC in curbing crude output
and Algeria called for similar commitments from other non-OPEC
producers.
    "It's pretty clear that we continue to attract speculative
length on the long side because of the expectation of the
rebalance of the market that's going to occur not only because
of the drop in North American production but now with the added
expectation that OPEC and possibly even Russia cutting back on
their output levels," said Gene McGillian, senior analyst at
Tradition Energy in Stamford, Connecticut.
    To get to $55-$60 per barrel prices, the market will need
fundamental proof like inventory levels dropping and clarity
that demand has picked up, McGillian said.
    Crude has rallied over the last couple of weeks after the
Organization of the Petroleum Exporting Countries aimed to agree
on cutting about 700,000 barrels per day (bpd), bringing its
output to 32.5 million-33.0 million bpd by its policy meeting in
Vienna on Nov. 30. 
    The group has since said its production rose in September to
the highest in at least eight years. It also forecast a rise in
2017 non-OPEC supply. 
    On Friday, oil prices fell slightly as investors weighed a
stronger dollar and another increase in the U.S. oil rig count
against hopes that more OPEC talk of output cuts would support
crude above $50 per barrel. 
    Bullish bets on RBOB gasoline also rose, data
showed on Friday, jumping to the highest levels since March
2015.

 (Reporting by Devika Krishna Kumar in New York; Editing by
Diane Craft and Chris Reese)

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