Oil Traders Reduce Bullish Positions as Tankers Exit Strait of Hormuz

Hedge funds and other money managers sold the equivalent of 44 million barrels in the six most important petroleum futures and options contracts over the seven days ending on May 12. The sales brought bullish petroleum positions to their lowest level since the first week of the conflict between the United States and Iran.

Investors reduced their net long exposure in petroleum markets as ceasefire talks between the United States and Iran continued. A small number of tankers were allowed to exit the Strait of Hormuz during the same period. The combined effect of the diplomatic developments and the limited tanker movements coincided with the reported reduction in speculative long positions.