Hedge funds appear to be falling out of love with oil, having reined in a record-breaking bet on higher prices, as Opec and Russia discuss raising production ahead of their meeting this month. Speculators had built up a record bullish position in oil in the early months of this year, accumulating a so-called net-long position — the difference between bets on higher and lower prices — of more than 1bn barrels across North Sea Brent and the US benchmark, West Texas Intermediate. That was one factor helping drive Brent to a four-year high above $80 a barrel late last month, but there are growing signs funds are losing their appetite.

The combined net long position across Brent and WTI has now been trimmed for six consecutive weeks, with the initial trickle of bets being closed out at risk of turning into a flood. In the week to May 29, exchange and regulatory data showed hedge funds reducing net longs by more than 10 per cent to just 823m barrels equivalent on paper, giving them the least bullish position since September last year. “Saudi Arabia and Russia’s recent signal that production cuts could be eased helped sent crude oil sharply lower during [last] week,” said Ole Hansen, head of commodity strategy at Saxo Bank. “Five consecutive weeks of selling became six with last week’s selling being the most aggressive seen so far in this current cycle.” However, some traders and analysts believe that this is just a sign of profit-taking rather than a significant shift in the long term view of crude.