Hedge funds are dialing up bullish bets on crude oil at the fastest pace in three months, driven by mounting geopolitical tensions and supply-side pressures, according to a recent HedgeWeek report.

The surge in long positions comes amid renewed conflict risk in the Middle East and Eastern Europe, which investors view as potential disruptors to global oil supply. These macro risks are adding fuel to the rally in crude prices, prompting hedge funds to reposition portfolios more aggressively.

One contributing factor is tightening inventories in the United States. Market participants cite constrained spare capacity and stronger demand forecasts as reinforcing their bullish view. Some funds had already begun increasing long bets following signs of recovery in demand and supply disruptions.

The speed of this repositioning is noteworthy. Analysts say the pace of accumulation in oil futures and related instruments is unusually brisk, reflecting a shift in sentiment toward energy as a high-conviction trade. While risks remain – including potential demand weakness or diplomatic de-escalation – current flows suggest funds are seeing oil as a hedge against escalating geopolitical volatility.

Hedge funds are leaning into crude in response to increasingly fluid global dynamics. With uncertainty accelerating, many see oil not just as a commodity but as a strategic asset in volatile markets.

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Source: https://www.hedgeweek.com/hedge-funds-boost-bullish-oil-bets-as-geopolitical-risks-reprice-crude/