Hedge funds increased bearish bets against oil by the most in three months on the prospect that duelling tariffs between the US and China would reduce energy demand.
Money managers increased their short-only positions on West Texas Intermediate (WTI) by 15,774 lots to 57,441 lots in the week that ended Feb 4, the biggest jump since October, according to Commodity Futures Trading Commission data.
US President Donald Trump placed a 10 per cent tariff on goods from China earlier in the week, and the country immediately announced countermeasures set to take effect next week. While the US imports only a small volume of crude from China, a trade dispute between the world’s two largest economies threatens to weigh on global consumption.
Since Trump’s return to office last month, crude markets have experienced volatile swings, causing investors to flee markets. WTI futures traded in a US$4.75 range this week, buffeted by the president’s various pronouncements and actions, before ultimately posting their third straight weekly decline.
To be sure, some concerns about supply shortages remain amid the possibility of further sanctions on Iran and Russia, as well as potential tariffs on crude from Canada and Mexico. BLOOMBERG
Share with us your feedback on BT’s products and services
