Hedge funds slashed short-only positions on European diesel to the lowest in over two years while stacking up fresh bullish wagers, a sign that traders anticipate that a historic fuels crunch will stretch on.
The profit margins for making diesel and gasoil from crude oil have surged toward all-time highs. Supplies have tightened dramatically, owing to fewer barrels coming out of the Middle East and an export ban on most shipments of Russian diesel as Ukrainian attacks on refineries ramp up once again.
With little sign of the crisis easing, funds slashed short-only bets on gasoil by 309 lots, bringing them to the lowest since July 2024, according to ICE Futures Europe data. They also added 1,498 long-only positions, up to the highest total since the week before the US-Iran war began. On a net basis, traders were the most bullish in about six months.
Bets on US-traded diesel contracts were similarly bullish, with gross long positions swelling to the highest since the first week of the US-Iran war, weekly Commodity Futures Trading Commission data showed.
Hedge funds' net-long bets on US gasoline rose to the most bullish since March 17, just before pump prices in America rose over $4 a gallon on average for the first time during the war.
Gasoline supplies, while relatively less strained than diesel, are also abnormally tight. Average pump prices are the highest ever seasonally, and efforts to increase production of distillate fuels like diesel often come at the expense of marginal gasoline production.
While crude oil prices remain calmer than fuel prices, hedge funds similarly added to bullish Brent crude and West Texas Intermediate oil positions. Funds brought net-long Brent bets to the most bullish since early June — before the US and Iran signed a preliminary agreement to halt the war that was later scrapped.
Brent crude prices have inched up gradually toward $100 a barrel again this week.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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