China and China dispel their worst fears

Investors have been the most optimistic about oil for two months, as the worst fears in the markets at the end of the year began to fade.
Hedge funds increased by 9% their net bets on rising Brent prices during the week ended January 15th, mainly because they continued to let off steam from the end of the year. year 2018, as indicated by data from the ICE Futures Europe Exchange.
This change of opinion culminated with the closing of the global benchmark to its highest level in eight weeks, after China proposed to reinforce its imports from the United States in order to end a trade war between the two largest economies in the world. Signs of the US Federal Reserve not to hike interest rates have also prompted investors to reverse the badumption that oil would fall while the dollar flared.
"Everyone thought the situation was bleak four or five weeks ago, with a mbadive economic slowdown coming, and I think that perspective has changed," said Leo Mariani, an badyst at KeyBanc Capital Markets, in an interview. in Austin, Texas. "There have been a lot of repositioning as a result."
Mitigating concerns over trade and monetary policy is helping the market focus on positive developments in the oil market: OPEC seems to mean that companies are cleaning up the overabundance of global supply and the International Energy Agency anticipates an improvement in demand this year.
Brent's net long positions – the difference between bullish and bearish bets – reached 172,905 options and futures in the week ending January 15th, the ICE Futures Europe Fund announced on Friday. It was the most bullish since November 20th. Long positions increased by 1.8%, while short positions decreased by 10%.
In the United States, oil has not started as strong in 18 years. After closing 2018 in free fall, US crude prices rebounded by more than 18% to start this year. This is the largest increase in the first 13 trading days since January 2001, according to data from New York Mercantile Exchange compiled by Bloomberg.
"Now that we are in the three weeks of January and that production cuts are starting to rage, it's a strong signal to take for shorts," said Chris Kettenmann, chief strategist for the company's "Shorts". at Macro Risk Advisors LLC. "For now, it's really Opec's game in terms of dynamism in the elimination of these barrels."
Although the outlook has improved, hedge funds will need more certainty about a trade deal or sustained growth to start significantly increasing their long-term bets.
"Until the economy gives green light to trade, I think it will be hard for investors to grow at a faster pace," said Kettenmann.