ICE Futures Europe data show hedge funds boosted their bullish Brent stance by 37,837 contracts, bringing net positions to 261,435 as of the week that concluded on Sept. 1. Net-long positions in US oil also climbed to the strongest level since June, according to the Commodity Futures Trading Commission.
Crude has firmed this week as the US launched a bombing campaign and Iran carried out retaliatory strikes on American bases, making efforts to reopen the world's key energy chokepoint, the Strait of Hormuz, more difficult. After a stretch of gradual improvement in traffic, Iran has been targeting ships moving through the strait, reviving fears of prolonged disruptions.
The security picture broadened beyond the strait. Iran launched volleys toward Jordan, Kuwait and Bahrain, while Israel cautioned that it would target civilian infrastructure if Tehran attacks. With wars ongoing in both the Middle East and Ukraine, refined fuels have surged more than crude. Net-bullish positioning in diesel is the highest since March, and on Thursday US retail diesel reached a record $5.85 a gallon.
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Gasoline bets jumped too, with net-long positions up to 89,263 lots, the most since December. For this point in the calendar, traders haven't been this bullish before, and pump prices are sitting at record highs for September. Put together, those shifts in positioning and prices come as tensions linger near the world's most important energy chokepoint, a backdrop that can keep day-to-day fuel costs feeling jumpy for regular drivers.
