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Investors bet against OPEC+ raising crude oil prices

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But many professional money managers are more hopeful about refined fuel prices, especially U.S. gasoline and diesel, expecting low inventories will ensure prices stay stronger than crude

Investors are increasingly downbeat about the outlook for crude oil prices as doubts grow OPEC+ will cut production enough to offset increasing non-OPEC output and a worsening economic outlook.

But many professional money managers are more hopeful about refined fuel prices, particularly U.S. gasoline and diesel, expecting low inventories will make sure prices stay stronger than crude.

Hedge funds and other money managers sold the equivalent of only 3 million barrels in the six most important petroleum futures and options contracts over the seven days ending on November 21.

Crude sales (-25 million barrels) including Brent (-16 million) and NYMEX and ICE WTI (-9 million) were offset by purchases of fuels (+21 million) including U.S. gasoline (+13 million) and European gas oil (+10 million).

The combined position in crude had been lowered to only 225 million barrels, which was in the lowest percentile and within 20 million barrels of the record low since 2013.

The position in NYMEX and ICE WTI was particularly low at just 70 million barrels (2nd percentile for all weeks since 2013) as U.S. oil production continues to jump.

Fund managers had sold WTI for eight weeks, reducing their position by a total of 216 million barrels since the end of September.

As a result, funds have become almost as bearish on crude as they were at the end of June before Saudi Arabia and its OPEC+ allies applied additional production cuts.

By contrast, the position in fuels was 114 million barrels (51st percentile), with substantial positions in U.S. gasoline (64 million barrels) and U.S. diesel (33 million barrels).

Funds have bought gasoline for five weeks running, adding a total of 38 million barrels since mid-October.

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