FILE PHOTO: Crude oil storage tanks | Photo Credit: NICK OXFORD
Hedge funds have significantly reduced their bullish bets on US crude, reaching the lowest level ever recorded, as the recent OPEC+ decision to increase production adds to existing forecasts of an impending global oil surplus this year.
In the week ending on September 29, money managers cut their net-long position on West Texas Intermediate by 14,630 contracts to 12,657, the lowest since data collection began in June 2006, according to reports from the Commodity Futures Trading Commission. At the same time, net-long positions in Brent crude experienced the most significant decline since June, as indicated by data from ICE Futures Europe.
The reduction in bullish sentiment has persisted for eight of the past ten weeks as the market trends toward an anticipated oversupply of oil in the upcoming fourth quarter. The recent OPEC+ decision to boost output by 137,000 barrels per day this October, despite decreasing summer demand, has only worsened the outlook.
This negative sentiment has been reinforced by two leading energy analysis organizations. The US Energy Information Administration indicated that oil inventories are expected to start rising this quarter, and the International Energy Agency predicted a record surplus in oil supply for the upcoming year.
Last week, US government data revealed the most substantial increase in crude and fuel stockpiles since July 2023, suggesting a weakening domestic market. Additionally, disappointing job data is shaking long-term consumption forecasts, intensifying fears that the ongoing global trade tensions may negatively impact economic growth.
However, this extremely bearish outlook might be mitigated by geopolitical uncertainties, including drone strikes in Ukraine targeting Russian energy facilities and ongoing conflicts in the Middle East.
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Published on September 14, 2025
