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3 Minutes to Read (Reuters market analyst John Kemp.) His viewpoints are his own.) (Reuters) – LONDON, July 5 (Reuters) – Last week, hedge funds made few adjustments to their petroleum positions as traders awaited the Organization of Petroleum Exporting Countries (OPEC) and its partners to make a decision on output levels. In the week ending June 29, money managers reduced their total position in the six most prominent futures and options contracts by only three million barrels, according to exchange and regulatory records. The total position remained strong at 940 million barrels, in the 84th percentile for all weeks since the beginning of 2013, with the third week positions ranging from 940 million to 945 million barrels. Long positions outweigh short positions by a ratio of 5.76:1, the 78th percentile since 2013 (tmsnrt.rs/3dHlNcE). Portfolio managers remain confident on the outlook for prices. However, since the middle of June, new buying has ceased due to a large net long position previously built and prices above the inflation-adjusted average since 2000. Small purchases of US gasoline (+7 million barrels) and European gas oil (+1 million barrels) were made last week, but they were more than offset by sales of Brent (-1 million barrels) and NYMEX and ICE WTI (-10 million). With petroleum prices already above their post-2000 average in real terms, pressure is rising on OPEC and its partners, collectively known as OPEC+, to respond by increasing production in order to prevent the market from overheating. The majority of hedge fund managers believe OPEC+ will take its time to alleviate the market deficit, preferring to let prices overshoot for a bit. However, the longer and higher the overshoot, the more the pressure on OPEC+ to modify its production strategy, which is why bullish positions has been muted for the time being. Columns that are related: – Hedge funds are paying attention to falling crude oil prices in the United States (Reuters, June 28) – Oil prices rise despite lower-than-average usage (Reuters, June 25) – Oil bulls count on OPEC+ and US shale firms exercising prudence (Reuters, June 22) – Oil prices hit multi-year highs as a result of US shale restriction (Reuters, June 4) (David Goodman edited the piece.)/nRead More

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