Saudi Arabia’s unilateral oil production cut, which was aimed at supporting prices from the effects of slowing economic growth in both China and Europe, has enticed hedge funds and other money managers back into the market, according to a report by Reuters.

Saudi Arabia’s unilateral oil production cut, which was aimed at supporting prices from the effects of slowing economic growth in both China and Europe, has enticed hedge funds and other money managers back into the market, according to a report by Reuters. 

The report data from the Commodity Futures Trading Commission (CFTC) as revealing that purchases of the six most important petroleum futures and options contracts over the seven days up to the end of 11 July totalled the equivalent of 115 million barrels, marking one of the largest weekly increases in the last ten years.

Funds were major buyers of Brent (+48 million barrels), NYMEX and ICE WTI (+33 million), European gas oil (+17 million), US gasoline (+12 million) and US diesel (+5 million) in the most recent week.

Across all six contracts in the two most recent weeks since Saudi Arabia extended its one million barrels per day cut for an extra month, funds purchased a total of 163 million barrels, while the ratio of bullish long positions to bearish short ones increased to 2.98:1 from 1.95:1.