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RPT-Hedge funds raise bullish exposure to U.S. crude

[madmax1980]

(Repeats story published Aug. 7 to widen distribution)
    By Barani Krishnan
    Aug 9 Hedge funds and other big speculators have
raised their bullish exposure to U.S. crude for the first time
in seven weeks, trade data on Friday showed, even as most
traders and investors fear weaker demand and higher supplies for
oil.
    Global crude futures have lost a quarter of their value in
the past six weeks as the approaching end of the U.S. summer
driving season and impending start of refinery maintenance
signals less gasoline demand and higher crude inventories.

    A rising U.S. oil rig count and record pumping of crude by
Middle East producers have also exacerbated concerns about a
glut. 
    Yet, data from the Commodity Futures Trading Commission
(CFTC) showed the largest money managers, including hedge funds,
raising their collective net long position in U.S. crude futures
and options during the week to Aug. 4, the first time since
mid-June.
    Just a week ago, this group held the smallest number of net
longs in U.S. crude since September 2010, a near five-year low.
    Some traders said the latest CFTC data represented a
disconnect from market reality, as all signs point to U.S. crude
and global benchmark Brent crashing below their 2015 lows as
supplies steadily exceed demand.
    "This tells me that the bottom-fishers in the market haven't
learned their lesson," said John Kilduff, oil trader and partner
at New York energy hedge fund Again Capital.
    "Here we go again as lots of people try to rush in and say
the 'bottom's in' and try and get long on this thing. I think
we're in for more downside."
   U.S. crude hit a more than four-month low of $43.80 on
Friday, settling less than $2 above its 2015 low.
    Brent plumbed a more than six-month bottom of
$48.45, closing about $3 above the year low.
    Some analysts said the rise in net longs could be due to
some traders rolling back short positions in fear of a technical
price rebound after weeks of losses.
     Brent tumbled 26 percent over the past six weeks while U.S.
crude lost 23 percent.
    "We've come off so much in the past couple of months that it
has likely encouraged some to have a nibble at getting long on
this market," said Matt Smith, director of commodity research at
Clipper Data, an energy database in New York.
    "I also suspect the bears had unwound some of their
positions from previous weeks, when the bulls were bloodying
themselves over a falling knife."