Hedge Funds Bet on Fuels Over Crude as Storm Trade Persists – Bloomberg

The post-Harvey buzz over fuels is making U.S. crude look like the poor stepchild of hedge funds.Since the storm battered the heart of America’s refining industry last month, bets on rising gasoline and diesel prices have surged for three straight weeks to the most bullish in years. But when it comes to West Texas Intermediate crude, skepticism is prevailing.It all boils down to where the supply glut is. While U.S. fuel stockpiles have plummeted — with a record draw from gasoline storage tanks — oil inventories rose as crude-processing plants in Texas struggled to get back on their feet. That’s prevented WTI from closing above $50 a barrel even though last week was the best for the U.S. benchmark since July.“The numbers are an assertion that they view the fundamentals for those markets as the strongest in years,” Tim Evans, a Citigroup Global Markets analyst in New York, said of the enthusiasm over fuels. “And that may be appropriate, given all that’s happened with the hurricane.”

Source: Hedge Funds Bet on Fuels Over Crude as Storm Trade Persists – Bloomberg

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