Benzinga - by Neil Dennis, Benzinga Staff Writer.
Traders in crude oil futures contracts pushed their holdings up to the highest levels in nearly a year despite a distinct lack of movement of higher prices for the past couple of months.
Data from Bloomberg shows around 660 million barrels of oil derivatives have been added so far this year, suggesting traders are positioning for prices to move higher in the coming weeks.
While the price of Nymex WTI, the benchmark U.S. crude oil futures contract, was trading 0.7% higher on Wednesday at $73.83 per barrel, the price is only up 3% over the first few weeks of 2024. In early trade on Wednesday, the United States Oil Fund ETF (NYSE:USO) was up 0.1% at $68.80.
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Positioning Shows Market Going Sideways
At their 2023 peak in October — as the war between Israel and Hamas was beginning — traders pushed speculative net long positions to 350,100. At this point, WTI was trading at $95 a barrel. Net longs are now down to 196,700, according to the CFTC data.
“The oil market continues to trade in a range despite lingering geopolitical risks in the Middle East,” said Warren Patterson, chief commodity strategist at ING.
“The oil market clearly does not expect further escalation, or at least escalation which impacts oil supply,” he added.
Gas Prices Rising
But wholesale gas prices are rising. This week, RBOB Gasoline rose 3.8% as demand picks up and refinery outages stifle supply.
Patrick De Haan, analyst at GasBuddy, said gasoline demand jumped to its highest level since Christmas.
“According to GasBuddy data, weekly U.S. gasoline demand jumped 4.6% from the prior week and was 4% above the average of the last four weeks,” he said.
Now Read: Oil Investing In 2024: 4 ETFs To Consider For Backing Or Hedging Prices
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