Hedge Funds Bet Oil Has Further to Fall as Glut Grows: Energy

Oil Tank Battery in Weld County Colorado with protective liner

Oil Tank Battery in Weld County

By Mark Shenk – Jan 25, 2015 – Bloomberg News

Hedge funds boosted bearish wagers on oil to a four-year high as U.S. supplies grew the most since 2001.

Money managers increased short positions in West Texas Intermediate crude to the highest level since September 2010 in the week ended Jan. 20, U.S. Commodity Futures Trading Commission data show. Net-long positions slipped for the first time in three weeks.

U.S. crude supplies rose by 10.1 million barrels to 397.9 million in the week ended Jan. 16 and the country will pump the most oil since 1972 this year, the Energy Information Administration says. Saudi Arabia’s King Salman, the new ruler of the world’s biggest oil exporter, said he will maintain the production policy of his predecessor despite a 58 percent drop in prices since June.

“There’s been a rush to call a bottom,” John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy, said by phone Jan. 23. “The fundamentals are still stacked against a rebound.”

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