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Funds boost bullish wagers on U.S. crude oil for 3rd straight week

Hedge funds and money managers modestly raised their bullish bets on U.S. crude for the third time in a row, data showed on Friday, even as prices slipped on worries of oversupply amid increased U.S. production and exports. The speculator group raised its combined futures and options position in two major NYMEX and ICE markets by 3,211 contracts to 288,766 in the week to Oct. 3, its highest since mid-August, U.S. Commodity Futures Trading Commission (CFTC) data showed. U.S. oil futures on the New York Mercantile Exchange fell by about 2.8 percent during those trading days, also pressured by profit-taking after big third-quarter gains.

Crude stockpiles in the United States fell sharply last week, but crude exports rose to 1.98 million bpd, the Energy Information Administration said. Rising U.S. crude production has held down West Texas Intermediate prices, while benchmark Brent’s price has been heavily influenced by policy directions over output cuts led OPEC. Russian President Vladimir Putin said this week that a pledge by OPEC and other producers, including Russia, to cut oil output to boost prices could be extended to the end of next year, instead of expiring in March. Saudi Arabia, meanwhile, hopes to reach a consensus with Russia and other major producers on the future of the deal before an OPEC meeting in November, Energy Minister Khalid al-Falih said on Friday. Traders have been watching keenly for signs of rising U.S. output.

The oil rig count, an early indicator of future output, is much higher than a year ago when only 428 rigs were active after energy companies boosted spending plans earlier in the year in anticipation of higher crude prices in coming months. Among refined products, money managers trimmed bullish bets on U.S. gasoline futures and options to the lowest in about a month. The speculator group also boosted net long positions in ultra low sulfur diesel to a new record, based on data going back to 2006. Stockpiles of distillates have drawn down consistently through the summer amid robust domestic as well as export demand. After Hurricane Harvey ravaged the heart of the U.S. oil and gas industry and led to several refinery shut downs, distillate markets have tightened further.
Source: Reuters (Reporting by Devika Krishna Kumar in New York, editing by G Crosse)

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