The net long position of global benchmark Brent crude oil has also decreased for three consecutive weeks, with the largest decline since December last year. The weak market sentiment is mainly influenced by US industrial policies, global trade concerns, and the situation in Ukraine. In addition, the possible recovery of crude oil exports from the Kurdistan region of Iraq has led investors to be more cautious about the future supply and demand situation.

In addition, OPEC+may delay production plans, further exacerbating market uncertainty.

Hedge funds cut long bets on crude oil, putting pressure on market sentiment

The latest data shows that hedge funds continue to reduce their net long bets on the crude oil market, reflecting investors' cautious attitude towards future oil price trends. The net long position of WTI crude oil in the United States has been declining for four consecutive weeks, reaching a new low since October last year, while the net long position of Brent crude oil has recorded the largest weekly decline since December last year.

The latest position data reflects the recent weakness in market sentiment, mainly influenced by trade concerns and the progress of negotiations between Russia and Ukraine, "said Warren Patterson, head of commodity strategy at ING Group.

The crude oil market is facing multiple negative factors

Recently, the crude oil market has experienced a continuous pullback, mainly influenced by the following factors:

1. Uncertainty in US industrial policies: Recent policy adjustments in the US have affected market expectations, causing investors to remain cautious about the outlook for crude oil demand.

2. Global trade concerns: There is uncertainty in the market regarding the future trade environment, which may affect expectations for global crude oil demand growth.

3. The situation in Russia and Ukraine may affect the supply side: the market pays attention to the negotiation progress of the Russia-Ukraine conflict, and if an agreement is reached, it may lead to supply recovery and further pressure on oil prices.

4. Crude oil exports or restart in the Kurdistan region of Iraq: If exports from the Iraqi storage area resume, global supply may increase, affecting market supply and demand balance.

In addition, OPEC+has not yet decided whether to continue with its production increase plan, which has brought additional uncertainty to the market.

WTI recorded a five week consecutive decline, marking the longest decline since last year

As of last Friday, WTI crude oil has fallen for five consecutive weeks, marking the longest decline since the end of 2023. The overall market sentiment tends to be cautious, and investors' confidence in future trends has significantly weakened. At the same time, the total holdings in the US crude oil market have also declined, and even after a slight rebound in recent times, they are still close to the lowest level in three months.

The recent policy adjustments in the United States have led to intensified market volatility, and investors' wait-and-see sentiment has significantly increased, "said industry analysts.

Editor's viewpoint:

The current crude oil market is facing multiple uncertainties, including US industrial policies, global trade concerns, the Russia Ukraine situation, and OPEC+decisions, leading to a cautious market sentiment. Hedge funds have continuously reduced their long positions, reflecting investors' increasingly conservative views on future oil prices.

In this context, the future trend of crude oil prices may be further influenced by global macroeconomic data, policy changes, and geopolitical events, and the market still needs to be vigilant about potential volatility risks.