Loading…
Hedge funds held a net long position of 86 million barrels in six major oil futures and options contracts on October 1, after buying 120 million barrels over three weeks from a near-record net short. Israel's threat to retaliate against Iran, including possible targeting of its oil fields and export terminals, drove prices sharply higher.
Short covering from a heavily bearish starting position amplified the price jump, and renewed threats to Iranian output raise supply risk. Price volatility in crude and distillates is likely to persist while the geopolitical situation remains unresolved.
jkempenergy.comJohn KempOct 7, 2024After 656 past bullish geopolitics events, Crude Oil (Brent) moved a median +1.9% over 5 sessions (63% higher; middle half -2.7% to +6.6%), and +0.7% over 20.
After 626 past bullish geopolitics events, Crude Oil (WTI) moved a median +2.1% over 5 sessions (62% higher; middle half -2.3% to +8.5%), and +1.6% over 20.
After 250 past bullish geopolitics events, ULSD / Diesel moved a median +1.7% over 5 sessions (58% higher; middle half -3.6% to +8.7%), and +0.9% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
Short covering from near-record bearish positions plus Israel's retaliation threat to Iranian oil infrastructure magnified the price rebound.
