Oil exchange traded funds are strengthening as the U.S. economic engine gains momentum, with hedge funds raising bullish bets on crude oil to a three-month high.
Money managers raised net-long positions, or bullish bets, for West Texas Intermediate crude by 4.4% in the week ended Dec. 24, the fourth consecutive increase and longest streak since July, reports Mark Shenk for Bloomberg.
“There’s a strong demand environment here and that’s attracted the interest of the hedge funds,” John Kilduff, a partner at Again Capital LLC, a hedge fund that focuses on energy, said in the article. “We’ve got a bullish surge going into the end of the year.”
Crude oil has strengthened after the Fed pointed to improved economic growth as a reason for its $10 billion tapering and recent government reports indicating faster-than-expected domestic growth. U.S. GDP expanded an annualized 4.1% in the third quarter, compared to average consensus calls for a 3.6% projected growth.
“There’s been increasing interest from money managers and that flow has been supportive for the market,” Tim Evans, an energy analyst at Citi Futures, said in the article.