Oil prices were under pressure early on Tuesday morning despite the Trump administration announcing fresh sanctions on Iran’s oil industry on Monday.
• President Trump’s recent push for a deal between Russia and Ukraine, his foot-dragging over Canadian and Mexican tariffs, and expectations of OPEC+ supply increases from April onwards have seen interest in crude oil futures plunge to multi-month lows.
• Open interest in WTI futures is now the lowest in nine months, falling to 2.12 million lots in the week ending February 18 according to CFTC data, with investors switching en masse to gold.
• The net length held by hedge funds and other money managers has posted four straight week-over-week declines and now stands at the equivalent of 103 million barrels, its lowest since October 2024.
• After hedge funds were incessantly shorting diesel futures in the US between June 2024 and January 2025, positioning in the ULSD futures contract finally turned long and net length ticked in at 11,872 lots in CFTC’s most recent data, suggesting tight distillate stocks could be a moderately bullish factor over the upcoming weeks.
At the same time that US-Russia talks on a final Ukraine settlement are underway, the Trump administration has been tightening the screws on Iranian oil supply. The White House announced yet another round of sanctions on anyone believed to facilitate Tehran’s exports to China. Despite that move, ICE Brent futures currently trading around $74 per barrel, beneath the $74.29-77.00 per barrel range that has so far contained every single settlement this month.
