By David Sheppard
NEW YORK, April 29 (Reuters) - Money managers increased their bets on higher U.S. crude oil prices to a combined record level in New York and London in the week to April 26, data from the CFTC showed on Friday, as prices rose to their highest level since September 2008.
The key speculator group, which includes hedge funds and other financial investors, raised its net-long positions in U.S. crude futures and options on the New York Mercantile Exchange by 11,202 to 301,118 during the period.
The data from the U.S. Commodity Futures Trading Commission covers the week to Tuesday, when front-month crude prices rose from $108.15 a barrel to $112.21.
On the ICE Exchange in London, speculators trimmed their net-longs in the look-a-like U.S. crude contract by 3,390 to 43,982, but the combined total with the positions on NYMEX hit a new all-time peak.
On NYMEX alone, the futures and options net-long position was just shy of the all-time high of 311,632 hit back in early March.
Since the middle of February when unrest in North Africa and the Middle East started to threaten oil supplies, the number of net-long positions on the NYMEX Exchange have increased by almost 85 percent. Over the same time period, net longs in London have more than doubled.
Of the 11,202 increase on NYMEX in the week to Tuesday, less than half came from future contracts, which rose by 4,225 over the week.
That suggests options were the method of choice for betting on higher prices over the time period.
Analysts have warned much of the current unrest in North Africa and the Middle East has been priced into the market, but should protests erupt in another large producer there is the potential for prices to spike.
WIDOWMAKER - OIL PRODUCTS
The group cut its net-long futures and options position in RBOB gasoline by 681 to 62,279 positions during the week, while heating oil net-longs were hiked by 4,130 to 37,122.
The positioning ran counter to the price trend over the week, with RBOB doubling its seasonal premium over heating oil from around 7 cents to 14 cents as refinery outages and falling gasoline stocks in the United States boosted the motor fuel.
A common trade at this time of year is to try and short heating oil futures and go long RBOB ahead of the summer driving season, but it is referred to as 'the widowmaker' as it can be very volatile, and has landed many traders with huge losses in the past.
On Friday, the spread between the two contracts was at 21 cents, the highest since August 2009.
Outright prices of both contracts rose over the week to Tuesday, with heating oil rising from $3.1585 a gallon to $3.2111, while RBOB spiked from $3.2331 to $3.3572 a gallon.
(Reporting by David Sheppard; Editing by Alden Bentley and Lisa Shumaker) Keywords: CFTC OIL/ (d.sheppard@thomsonreuters.com; +1 646 223 6057; d.sheppard.thomsonreuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
NEW YORK, April 29 (Reuters) - Money managers increased their bets on higher U.S. crude oil prices to a combined record level in New York and London in the week to April 26, data from the CFTC showed on Friday, as prices rose to their highest level since September 2008.
The key speculator group, which includes hedge funds and other financial investors, raised its net-long positions in U.S. crude futures and options on the New York Mercantile Exchange by 11,202 to 301,118 during the period.
The data from the U.S. Commodity Futures Trading Commission covers the week to Tuesday, when front-month crude prices rose from $108.15 a barrel to $112.21.
On the ICE Exchange in London, speculators trimmed their net-longs in the look-a-like U.S. crude contract by 3,390 to 43,982, but the combined total with the positions on NYMEX hit a new all-time peak.
On NYMEX alone, the futures and options net-long position was just shy of the all-time high of 311,632 hit back in early March.
Since the middle of February when unrest in North Africa and the Middle East started to threaten oil supplies, the number of net-long positions on the NYMEX Exchange have increased by almost 85 percent. Over the same time period, net longs in London have more than doubled.
Of the 11,202 increase on NYMEX in the week to Tuesday, less than half came from future contracts, which rose by 4,225 over the week.
That suggests options were the method of choice for betting on higher prices over the time period.
Analysts have warned much of the current unrest in North Africa and the Middle East has been priced into the market, but should protests erupt in another large producer there is the potential for prices to spike.
WIDOWMAKER - OIL PRODUCTS
The group cut its net-long futures and options position in RBOB gasoline by 681 to 62,279 positions during the week, while heating oil net-longs were hiked by 4,130 to 37,122.
The positioning ran counter to the price trend over the week, with RBOB doubling its seasonal premium over heating oil from around 7 cents to 14 cents as refinery outages and falling gasoline stocks in the United States boosted the motor fuel.
A common trade at this time of year is to try and short heating oil futures and go long RBOB ahead of the summer driving season, but it is referred to as 'the widowmaker' as it can be very volatile, and has landed many traders with huge losses in the past.
On Friday, the spread between the two contracts was at 21 cents, the highest since August 2009.
Outright prices of both contracts rose over the week to Tuesday, with heating oil rising from $3.1585 a gallon to $3.2111, while RBOB spiked from $3.2331 to $3.3572 a gallon.
(Reporting by David Sheppard; Editing by Alden Bentley and Lisa Shumaker) Keywords: CFTC OIL/ (d.sheppard@thomsonreuters.com; +1 646 223 6057; d.sheppard.thomsonreuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.