Hedge funds and money managers boosted bullish wagers on U.S. crude in the week to Nov. 28 to the highest on record, data showed, ahead of a meeting by the world’s top producers on the fate of a deal to curb output and due to an outage at a key pipeline.
The speculator group raise its combined futures and options position in New York and London by 51,853 contracts to 451,877, the U.S. Commodity Futures Trading Commission (CFTC) said. That was the highest on record, based on data going back to 2009.
Gross short positions on the New York Mercantile Exchange dropped to the lowest since February at 40,146 contracts while gross long positions surged to the highest since late February at 436,630 contracts, the data showed.
During the week, U.S. crude prices rose about 2 percent and rallied to the highest since mid-2015.
Calgary-based TransCanada Corp shut down the 590,000 barrel-per-day Keystone pipeline, one of Canada’s main crude export routes to the United States, on Nov. 16 after 5,000 barrels of oil leaked in South Dakota. Keystone carries crude from Alberta’s oil sands to U.S. refineries.
The pipeline restarted, although there was no timeline for when U.S. regulators would allow it to return to full capacity.
Oil markets have significantly tightened after about two years of oversupply due to an effort by the Organization of the Petroleum Exporting Countries (OPEC) and a group of other producers, including Russia, to withhold 1.8 million bpd of production.
The deal to restrict output expires in March 2018, but OPEC and non-OPEC producers led by Russia agreed to extend the cuts until the end of 2018 as they try to finish clearing a global glut of crude while signaling a possible early exit from the deal if the market overheats.
Among refined products, bullish bets on NYMEX diesel surged to a fresh record of 74,732 contracts.
Benchmark U.S. diesel prices are up about 12 percent since mid-October thanks to dwindling stockpiles and upcoming winter demand, opening a number of rare arbitrage options.
A ship carrying diesel has left Saudi Arabia heading towards New York for the first time in more than two years, according to Thomson Reuters Eikon ship tracking data and traders.
Bullish bets on U.S. gasoline, meanwhile, eased further from a record high with 90,122 contracts.