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LSGO futures net speculative length slips to four-month low amid largest increase in short positions on record

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LSGO futures net speculative length slips to four-month low amid largest increase in short positions on record

14th September 2020 21:51 GMT

Speculative net long positions in ICE low sulfur gasoil futures fell 42,389 contracts to 21,114 in the week to Sept. 8, a four-month low, according to Intercontinental Exchange data.

This was the largest week-on-week fall since the week ended Feb. 13, 2018 when net speculative length fell 50,388 contracts to 144,954.

Managed money long positions fell by 12,840 contracts to 80,756 contracts, while short positions increased by 29,594 contracts to 59,642, the largest increase in short positions on record.

The prompt spread on the ICE low sulfur gasoil futures hit a three-month low of minus $7.75/mt on Sept. 4 and remained there until the expiry of the September contract on Sept. 10.

The new prompt spread, now October versus November, was trading around minus $5.75/mt on the morning of Sept. 14.

The market had weakened enough that traders were looking at floating storage for diesel amid ample supply of diesel and below-normal consumption of road fuels, although these looked to have fallen through as the market firmed after the end of the reporting week.

Open interest in the futures rose by 12,058 contracts over the reporting week to 921,170 contracts, a seven-month high.