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CHART CENTRAL

Crude’s 14% January fuels positive speculation

The latest data from ICE Futures Europe show that money managers’ net long position in Brent crude futures jumped 27% in the first three weeks of January from its December close, to 209,896 contracts. Over that period, the price per barrel of Brent crude advanced $7.70, or 14%.

Since 2014’s initial collapse in oil prices from around $100 per barrel, money managers have been far more active in Brent futures as monthly price volatility has created more opportunity. Prior to September 2014, the median monthly change in prices was 0.234% since January 2012. Over the ensuing 16 months, the price per barrel fell to $35 from $95 with a median monthly return of -8.26%, including 18% declines in both November and December of 2014. Manager interest was piqued during the first quarter of 2016 as the net long futures position rose to about 450,000 contracts. Between February 2016 and Jan. 22, 2019, the average monthly net long position in Brent futures was about 400,000 contracts, more than double that of the 36 months before.

Brent prices over that period have had an average monthly return of 3.25% with a standard deviation of 9.9%.