Hedge fund managers are selling off oil futures amid fear that projected recession could cause demand for the commodity to drop, thereby, reducing the value in the global market.
Investors trade in oil futures by agreeing to sell or buy crude oil at a certain date and particular price, which is often more than the cost at the period of the agreement.
According to ZeroHedge, Oilprice about 201 million barrels have been sold in the past four weeks, with 110 million barrels offloaded last week among futures’ contracts.
It was reported that last week’s sell-off saw bullish long positions down by -71 million barrels, as against bearish shorts (those betting that the oil price will fall) rising by 39 million barrels.
Source: Ripplesnigeria