NEW YORK — Hedge funds raised oil bets for the first time in five weeks on speculation the U.S. will attack Syria after saying the Middle East country’s use of chemical weapons killed more than 1,400 people.
Money managers boosted net-long positions in West Texas Intermediate crude, or wagers that prices will increase, by 4.9 percent to 317,523 futures and options combined in the seven days ended Aug. 27. WTI, the U.S. benchmark, rose to a two-year high last week following a chemical attack on a Damascus suburb. President Barack Obama said Saturday he’ll seek authorization from Congress before directing a military strike on Syrian targets.
“You buy at the drumbeats of war and sell at the first shot,” Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis, said. “That’s kind of how people are trying to play this.”
WTI advanced $4.05, or 3.9 percent, to $109.01 a barrel on the New York Mercantile Exchange over the week. The Middle East accounted for about 35 percent of global oil output in the first quarter of this year, according to the International Energy Agency.
Hedge funds and other money managers raised bullish bets on Brent crude to the highest in more than two years, according to ICE Futures Europe.
Speculative bets that prices will rise, in futures and options combined, outnumbered short positions by 231,962 lots in the week to Aug. 27. That’s up 11 percent from last week and is the most since at least January 2011, the starting point for the data series.