New York (HedgeCo.Net) – Hedge funds have cut down on their bullish bets on West Texas Intermediate (WTI) crude now that the risk of disruption in Middle East oil exports has been diminished, Bloomberg reports.
“The last few weeks, the market has been in a Syria-headline-driven bubble,” a source told Bloomberg, “Now that the talk has gone from hawkish to dovish, the Syria premium is getting excised from the market.”
WTI is now at two-week low now that the US and Russia are working together in an effort to eliminate Syria’s chemical weapons cache.
“Money managers reduced net-long positions, or wagers that prices will increase, by 5.2 percent to 290,058 futures and options combined in the seven days ended Sept. 10, the Commodity Futures Trading Commission’s Commitments of Traders report showed Sept. 13. That was the lowest level since July 9.” Bloomberg says.
In an updated report, the news source said that also falling is Brent crude, which: ”Fell to its lowest in four weeks on signs that the threat of imminent military strikes against Syria is receding as the U.S. pursues a plan to confiscate the nation’s chemical weapons.”
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