Hedge funds ditched vitality shares final week for the primary time in three weeks, regardless of a rally in oil costs triggered by the prospect of a widening provide deficit, Goldman Sachs GS.N mentioned in a report.
The transfer, based on the financial institution’s prime brokerage unit, was primarily led by quick gross sales, that means that hedge funds have been speculating on a decline in vitality shares’ costs. The financial institution mentioned gross sales occurred in each North America and Europe.
Goldman Sachs, as one of many greatest suppliers of lending and buying and selling providers to traders via its prime brokerage unit, is ready to monitor hedge funds’ funding tendencies.
Total, Goldman Sachs mentioned hedge funds’ buying and selling e book was underweight vitality shares at ranges approaching a Might 2020 low. It added hedge funds elevated their quick bets on U.S. vitality shares, moreover oil, gasoline, consumable fuels and vitality tools and providers.
Earlier this month, Saudi Arabia and Russia prolonged a mixed 1.3 million barrels per day of provide cuts to the tip of the 12 months, spurring predictions that benchmark Brent crude costs may surpass $100 a barrel this 12 months.
Nonetheless, China’s sluggish post-pandemic financial restoration has additionally raised considerations that demand could decelerate.
Supply: Reuters (Reporting by Carolina Mandl in New York and Nell Mackenzie in London Modifying by Mark Potter)