Funds cashed out as August WTI hit highs after OPEC+ dithering

Quantum Commodity Intelligence - Funds shed bullish bets in WTI futures and options when crude prices slumped on July 6, data from the Commitment of Traders Report showed, as OPEC+ talks broke down and prices crashed on profit taking.

Long lots held by the managed money category on Nymex dropped 32,903 lots over the week to July to 400,770 lots, while short lots in WTI futures and options was little changed, gaining 783 to 26,900 lots.

Most of the fall, around 29,200 lots, was futures rather than options.

Funds also liquidated some length in Brent futures and options on the ICE exchange, cutting 5,220 long lots compared to only 424 short lots over the same week.

Crude prices dropped by 4% from Monday's high to Tuesday's close, as OPEC+ talks about unwinding supply cuts ended without agreement.

That triggered fears that the coalition to keep oil off the market could break down.

As hedge funds unwound crude positions, there was also a knock-on impact into oil product futures.

Funds cut 5,652 long lots in Low Sulfur Gasoil futures and options, and added 1,897 shorts on ICE.

In the US, gasoline took the brunt of the sell off after WTI.

Funds cut 11,742 long lots in RBOB gasoline futures and options on Nymex, and added 2,579 short lots.

Length in US heating oil futures on Nymex were only cut 1,732 lots, while 2,083 short lots were added.

August WTI slumped from a high of $76.98/b to a low of $72.94/b on July 6 as jitters set in following the failure of OPEC+ to strike a new quote target on the weekend.