By Mark Shenk Dec 31, 2013 11:29 PM GMT+0300
Hedge funds increased bullish bets on crude oil to the highest level in three months as stockpiles dropped and the U.S. economy expanded more than forecast.
Money managers raised net-long positions, or wagers on rising prices for West Texas Intermediate crude, by 4.4 percent in the week ended Dec. 24, U.S. Commodity Futures Trading Commission data show. It was the fourth consecutive increase, the longest streak since July.
WTI topped $100 a barrel for the first time in two months on Dec. 27, propelled by falling inventories in the U.S., the world’s biggest oil-consuming country. The Federal Reserve cited prospects for improved growth for a reduction in its bond-buying program, and a government report showing that the domestic economy accelerated in the third quarter at a faster rate than previously estimated bolstered expectations for strengthening fuel demand.
“There’s a strong demand environment here and that’s attracted the interest of the hedge funds,” said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy. “We’ve got a bullish surge going into the end of the year.”
WTI advanced $2, or 2.1 percent, to $99.22 a barrel on the New York Mercantile Exchange in the report week. Prices fell 87 cents, or 0.9 percent, to settle at $98.42. Today. Futures rose 7.2 percent this year, capping the fourth increase in five years. The CFTC data, normally released on Fridays, was delayed because of the Christmas holiday.