(Bloomberg) -- Money managers had amassed the biggest net-long positions on Brent oil in eight months, even before Washington announced a sweeping package of sanctions targeting Russia’s energy industry.
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The moves were driven by a colder-than-expected Northern Hemisphere winter and expectations President-elect Donald Trump will try and restrict flows of Iranian oil.
Speculators increased overall bullish positions on the global crude benchmark, raised the number of net-long contracts by nearly 40,000 to a total of almost 227,000 lots as of Jan. 7, according to data released on Friday. The move was largely driven by an increase in long-only contracts, while short-only ones fell slightly.
Frigid weather in Europe and the US has raised energy demand for heating and could also disrupt refineries. Net-long positions are likely to increase even further following the restrictions on Russia, the most aggressive since the invasion of Ukraine.
European diesel and US heating oil also saw the highest level of net-long positions since July and September, respectively. Both contracts saw fresh longs, with short-only contracts being dumped.
The Intercontinental Exchange and the US Commodity Futures Trading Commission release the positioning data — which captures movements in the week through Tuesday — every Friday.
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