Bets on Oil Rally Highest Since July

ICE Brent net longs up 11,371 contracts to 182,783; highest net length in ICE Brent crude since July 2014.

Hedge funds and large speculators increased their bets on rising Brent crude oil prices last week to their highest for more than seven months, exchange data showed on Monday.

Speculators increased their net long positions in Brent futures and options by 11,371 contracts to 182,783 in the week to Feb. 24, InterContinentalExchange (ICE) data shows.

Last July net speculative longs in ICE Brent hit a high of a little more than 240,000, according to exchange data.

Speculators in ICE gasoil also raised their net long positions in the week to Feb. 24, increasing net long holdings by 4,533 contracts to 38,383.

The increase in net speculative oil length followed a sharp rise in oil prices in the preceding four weeks after more than six months of heavy falls.

Brent crude more than halved between June and January, dropping to a low of just over $45 a barrel due to global oversupply that has filled oil stockpiles around the world.

Prices started to rally in mid-January and Brent reached $63 a barrel on Feb. 17, encouraging investors to buy into oil futures and options. The price rally has since paused, with Brent trading around $61.25 a barrel by 1300 GMT on Monday.

Analysts said the sharp and very rapid increase in speculative length could herald another sell-off if the market begins to weaken and investors are forced to liquidate positions.

"This could lead to downward pressure on prices when investors start selling," Carsten Fritsch, senior oil and commodities analyst at Commerzbank in Frankfurt, told the Reuters Global Oil Forum.

Three quarters of the increase in net length over the past week was a result of fresh long positions and a quarter was due to reductions in short positions, the ICE figures showed.