LONDON (Reuters) – Hedge fund managers purchased petroleum derivatives for the second week running, though buying was in small volumes in most contracts, with trading quiet around the end-of-summer holiday period.

FILE PHOTO: A petrol station attendant prepares to refuel a car in Rome, Italy, January 4, 2012. REUTERS/Max Rossi/File Photo

Money managers bought the equivalent of another 16 million barrels in the six most important petroleum futures and options contracts in the week to Sept. 7 (

The purchases built on 60 million barrels of buying the previous week, which was the second-largest volume this year, after Hurricane Ida disrupted oil production in the Gulf of Mexico.

The only significant change last week was substantial buying of European gas oil (+12 million barrels), building on large-scale buying the previous week (+21 million barrels).

Elsewhere, there were only small purchases of Brent (+6 million), NYMEX and ICE WTI (+1 million) and U.S. diesel (+1 million), partially offset by small sales of U.S. gasoline (-4 million).

Portfolio managers remain moderately bullish towards oil, with a combined position of 753 million barrels (70th percentile for all weeks since 2013) and long positions outnumbering short ones by a ratio of 5.36:1 (72nd percentile).

But much of the bullishness is concentrated in middle distillates, where long positions outnumber short ones by a ratio of 9.1:1, which is much higher than crude (5.3:1) or gasoline (2.8:1).

Fund managers appear to be betting that manufacturing and freight will remain strong, even as the coronavirus resurgence continues to restrict cross-border aviation.

Related columns:

– Oil attracts heavy fund buying as prices bounce (Reuters, Sept. 6)

– Hedge fund oil selling runs its course (Reuters, Aug. 31)

– Hedge funds’ bullishness on oil ebbs away (Reuters, Aug. 23)

Editing by David Goodman

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