Traders haven't been this bullish on oil prices, which are stuck at around $US50 a barrel

Photo: Bryan Steffy/ WireImage via Getty Images.

Traders have never been this bullish on oil prices. Yet the price of crude continues to remain stuck at just above $US50 a barrel.

Net long positions — betting on further strength — in crude oil rose to new record high at 558,00 contracts for the week ending February 14, up almost 30,000 from seven days earlier, according to ANZ Bank. The bank cited figures contained in the US Commodity Futures Trading Commission’s (CFTC) weekly Commitment of Traders (CoT) report.

While oil prices have recovered from a plunge in 2014, the rally has lost momentum and prices are at best moving sideways. Increase in US production now threatens to undermine efforts by the Organisation of Petroleum Exporting Countries (OPEC) and some non-members to reduce the global oversupply of oil. US oil rig continued to rise, data showed. The tally of oil rigs, which plunged with oil prices in 2014, rose by eight last week. The count is more than 80% above the low reached in May 2016, according to Baker Hughes.

This chart shows the jump in positive oil bets

ANZ uses non-commercial positions reported by the CFTC as they are seen as a proxy for speculative positioning as they seek to profit from movements in the asset price as opposed to hedging business activities.

ANZ also said currency traders continued to expect commodity currencies to perform well in the period ahead, adding to long positions in the Canadian, Australian and New Zealand dollars in early February. They extended their net long commodity currency positions by $US1.3 billion.

And this one illustrates the declining bets on the US dollar.

The report also shows that net long positioning in the US dollar among traders continued to be pared last week, for the sixth consecutive week. Bets on the US currency rising fell to the lowest level since October 2016, ANZ said.

“It remains to be seen whether strong US data and a more upbeat Fed is enough to see a halt to the dollar selling,” Khoon Goh, ANZ’s Head of Asia Research and Rini Sen, a FX strategist at the lender, said.

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