(John Kemp is a Reuters market analyst. The views expressed are his own)
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By John Kemp
LONDON, June 5 (Reuters) - Hedge fund managers continued to square up positions after the OPEC meeting on May 25 left oil production allocations unchanged for another nine months.
Money managers increased their combined net long position in the three main Brent and WTI futures and options contracts by 20 million barrels in the week to May 30.
Fund managers also increased their net long position in U.S. gasoline by 7 million barrels and in U.S. heating oil by 6 million barrels, analysis of position data published by regulators and exchanges showed.
But most of these position changes were driven by the closure of previous bearish short positions rather than the creation of new bullish longs.
Short positions in crude, gasoline and heating oil were cut by 27 million barrels, 6 million barrels and 8 million barrels respectively for a total decrease of 41 million barrels.
By contrast, long positions in crude and heating oil were cut by 8 million and 2 million barrels respectively, while gasoline longs rose by a mere 1 million barrels, making for a total reduction of 9 million barrels.
Hedge fund positions in crude and refined products are fairly close to neutral (allowing for the persistent long bias among money managers as a whole, especially in crude).
Fund managers hold 3.4 long positions in crude for every 1 short position, up from a recent low of 2.35 but well down from the mid-April high of 5.8, let alone the record 10.3 reached in mid-February.
It has been a tough start to the year for most fund managers, with big bullish positions in February and April repaid only with a painful decline in prices.
Crude oil prices have generally remained under pressure in recent days, with little sign of concerted buying despite plenty of bullish talk.
Most fund managers have therefore retreated to the market sidelines, waiting to see if the long-promised drawdown in global stocks will eventually materialise in the third quarter. (Editing by David Goodman)