ChainThink reports that on March 14, as the crude oil market experienced its most volatile period on record, hedge funds’ bullish sentiment toward Brent crude reached its highest level in six years. Data from ICE Futures Europe for the week ending March 10 showed that money managers increased their net long position in the global benchmark by 65,438 contracts to 351,032 contracts—the highest level since February 2020. Meanwhile, data from the U.S. Commodity Futures Trading Commission revealed that bullish bets on U.S. crude rose to an eight-month high.
The Middle East conflict has nearly halted traffic through the Strait of Hormuz for nearly two weeks, leaving market participants unprepared for the prolonged supply disruption. The seismic shock to energy markets has forced major crude oil producers in the region to cut production, while some refiners have defaulted on contracts. In financial derivatives markets, multiple volatility indicators have risen to their highest levels since the Russia-Ukraine conflict. In response, algorithmic traders have pushed long positions to their limits, while options trading has been suppressed as dealers reduce their risk exposure. (Jin10)