Oil prices are poised for a pullback after hedge funds and money managers raised their bullish bets on energy futures to record levels, analysts say.
Speculative bets that U.S. crude prices will rise have surged since September as OPEC and Russia hammered out a deal to continue capping their oil production. The deal has helped to balance an oversupplied market and drain global stockpiles of crude oil.
Hedge funds and other money managers raised their long positions, or bets that crude prices will keep going up, to the highest levels in 2017, according to data from the U.S. Commodity Futures Trading Commission covering the week through Dec. 26. This financial positioning represents the biggest risk to oil prices in the near term, according to Matt Smith, director of commodity research at ClipperData.