Oil traded near the highest close in three years as hedge funds increased their bullish bets on crude to the highest in more than a decade.

Futures added 0.6 percent in New York after advancing 4.7 percent last week. Money managers boosted their net-long positions in West Texas Intermediate to the highest level in data going back to 2006, according to figures from the U.S. Commodity Futures Trading Commission on Friday. Brent crude in London closed above $70 a barrel for the first time in three years on Monday.

Oil is extending a two-year rebound as the Organization of Petroleum Exporting Countries and its allies trim production to drain a global glut. Citigroup Inc., Societe Generale SA, and JPMorgan Chase & Co. predict the coalition may begin winding down supply curbs from the middle of the year, before their scheduled conclusion in December, as the market rebalances.

WTI for February delivery was at $64.71 a barrel on the New York Mercantile Exchange, up 41 cents, at 8:09 a.m. in Hong Kong. There was no settlement Monday because of the Martin Luther King Jr. holiday in the U.S., and all transactions will be booked Tuesday. WTI closed at $64.30 on Friday, the highest close since December 2014.

Brent for March settlement added 39 cents, or 0.6 percent, to $70.26 a barrel on the London-based ICE Futures Europe exchange on Monday, also the highest close since December 2014. The global benchmark crude ended the session at a premium of $5.46 to March WTI.

Source:
courtesy of BLOOMBERG

by Ben Sharples

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