September 28, 2018 / 7:59 PM / 8 months ago

UPDATE 2-Hedge funds raise bullish bets on U.S. crude on supply worries

 (Adds positioning in natural gas, gasoline)
    By Stephanie Kelly
    NEW YORK, Sept 28 (Reuters) - Hedge funds slightly increased
their bullish wagers on U.S. crude in the week to Sept. 25, data
showed on Friday, as Saudi Arabia and Russia ruled out any
immediate increase in production, raising concerns about supply
    The speculator group raised its combined futures and options
position in New York and London by 3,728 contracts to 346,566
during the period, the U.S. Commodity Futures Trading Commission
(CFTC) said on Friday.
    Brent crude speculators raised their net long positions by
28,465 contracts to 496,343 in the week to Sept. 25, the highest
in four months, data from Intercontinental Exchange        
    Oil prices posted fresh four-year highs in the period after
top global producers ended a meeting with no formal
recommendation for any additional supply boost to counter
falling supply from Iran.
    U.S. sanctions affecting Iran's petroleum sector, due to
come into force in November, are expected to tighten global
crude supply. 
    JPMorgan said U.S. sanctions on Iran could lead to a loss of
1.5 million barrels per day (bpd), while commodities trader
Mercuria warned that as much as 2 million bpd could be knocked
out of the market.
    Speculators have been more bullish on global benchmark Brent
futures compared with U.S. crude because surging domestic output
is expected to keep a lid on prices. 
    U.S. crude production rose 269,000 bpd to a record 10.964
million bpd in July, the U.S. Energy Information Administration
said in a monthly report on Friday.             
    However, there are signs of a slowdown as production has
outpaced infrastructure in key basins in the country. New
drilling has stalled in the third quarter, data showed, with the
fewest additions in a quarter since 2017 due to pipeline
constraints in the nation's largest oil field.        
    Meanwhile, natural gas speculators in four major NYMEX, ICE
markets raised their net long positions by 45,590 contracts to
160,597 in week to Sept. 25.
    In refined products, money managers raised bullish wagers by
12,025 contracts to 91,131 during the period, the highest level
in about a month.

 (Reporting by Stephanie Kelly
Editing by Tom Brown and Sandra Maler)
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