Hedge funds and other speculators have upped their bullish wagers on crude oil futures to the highest level in more than four years, perhaps betting that $100 oil will arrive sooner rather than later as the global economic recovery continues, spurring oil demand along the way.
For the week ending Dec. 28, long bets on crude futures jumped 4.6% from the previous, according to data from the Commodities Futures Trading Commission. It was the biggest total in records going back to June 2006, Bloomberg News reported. NYMEX-traded crude for February delivery jumped 92 cents, or 1%, to settle at $90.30 a barrel today.
The U.S. Energy Department is forecasting global oil demand will rise by 1.7% to a record 87.8 million barrels a day this year. Many analysts and banks have forecast that oil will trade over $100 a barrel this year while energy investor T. Boone Pickens said prices could average $110-$120 per barrel.
Net long positions held by managed money rose by 9,578 futures and options combined to 217,046 the week ending Dec. 28, according to the CFTC report and have nearly tripled since May, Bloomberg reported.
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