Hedge Funds Continue To Increase Bullish Oil Bets

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Hedge funds and other large speculators continue to raise their bullish bets on crude oil futures, increasing their net-long positions by 12% for the week ending Jan. 11, according to data provided by the Commodities Futures Trading Commission. It was the biggest advance since the week ended Dec. 7, according to Bloomberg News.

Oil prices touched a 27-month high on Jan. 12 on news that China's oil imports surged 18% in 2010. The closure of the Trans-Alaska Pipeline also helped boost prices. For the week, NYMEX-traded crude futures jumped 4%, good for the best weekly performance since early December.

Net-long positions held by managed money, including hedge funds, commodity pools and commodity-trading advisers, advanced by 22,361 futures and options combined to 209,769, Bloomberg News reported, citing the CFTC report. The International Energy Agency is forecasting China's consumption of refined fuels will jump 4.8% this year.

Traders reduced their long bets on gasoline futures by 0.2% to 69,251 options and futures contracts, according to the CFTC data. Long bets on heating oil surged 10% last week to 40,976 contracts, the CFTC report showed.