Speculators boost bullish oil bets to record on Cushing

‘Upside Risk’

Net-long positions in WTI crude increased by 7,195 futures and options combined to 339,052. Long positions gained by 8,467 to a record 360,868, while shorts rose by 1,272 to 21,816.

“The risk for prices is to the upside rather than lower,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. “There are a lot of bullish factors out there that can move prices higher in the weeks ahead.”

Money managers’ bullish wagers on ultra low sulfur diesel, a category that includes heating oil, surged by 10,827 futures and options combined to 45,420, the highest level in a year.

The fuel gained 0.26 cent, or 0.1%, to $3.1043 a gallon in the report week. The contract gained 0.28 cent to $3.0893 on Feb. 28 and was at $3.0832 today.

Net-long bets on gasoline held by money managers, including hedge funds, commodity pools and commodity-trading advisers, climbed by 14,999 futures and options combined, or 37%, to 55,350, the most since September, the CFTC data showed.

Futures decreased 3.42 cents, or 1.2%, in the reporting period to $2.7981 a gallon on the Nymex. The contract rose 2.8 cents, or 1%, to 2.7898 Feb. 28, and was at $3.0226 today.

Pump Prices

Regular gasoline at the pump, averaged nationwide, gained 0.3 cent to $3.459 a gallon yesterday, according to Heathrow, Florida-based AAA, the largest U.S. motoring group. Retail prices have climbed for 24 days.

Net-long wagers on four U.S. natural gas contracts increased 5,520 futures equivalents, or 1.2%, to 447,529, the highest since May.

The measure includes an index of four contracts adjusted to futures equivalents: Nymex natural gas futures, Nymex Henry Hub Swap Futures, Nymex ClearPort Henry Hub Penultimate Swaps and the ICE Futures U.S. Henry Hub contract. Henry Hub, in Erath, Louisiana, is the delivery point for Nymex futures, a benchmark price for the fuel.

Natural gas futures (NYMEX:NGJ14) fell 45.5 cents, or 8.2%, to $5.096 per million British thermal units on the Nymex during the report week. Futures climbed 9.8 cents, or 2.2%, to $4.609 Feb. 28. They slipped to $4.556 today.

“Speculators are prepared for the upside potential of the crude oil market, leaving them unprepared for downside risk,” said Tim Evans, an energy analyst at Citi Futures in New York. “This leaves them very vulnerable.”

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