MNRE cancels 438 Mw hydro power proposals of 50-odd private companies

NTPC profit for 2018-19 jumps 20 per cent to Rs 12,633 crore9 hrs ago

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ONGC Videsh reports 71 per cent jump in net profit for 2018-19 at Rs 1,682 crore

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OPINION: Iran sanctions decision rewards hedge fund oil bulls

The Trump administrations decision to toughen sanctions on Irans oil exports has rewarded fund managers who have been increasingly confident that the oil market will tighten significantly this year, lifting prices

LONDON:Hedge fundmanagers added even more bullish long positions in crude oil and gasoline last week as traders bet prices will continue rising despite a sluggish economy and political sensitivity around escalating motoring costs.

The Trump administrations decision to toughen sanctions onIrans oil exports has rewarded fund managers who have been increasingly confident that the oil market will tighten significantly this year, lifting prices.

Even before the latest sanctions announcement, hedge funds and other money managers increased their net long position in the six most importantpetroleumfutures and options contracts by another 61 million barrels in the week to April 16 (

Fund managers have purchased a total of 564 million barrels of crude and refined products over the last 14 weeks in one of the longest and certainly smoothest and most consistent bull markets on record.

Funds were net buyers last week of Brent (+22 million barrels), NYMEX and ICE WTI (+21 million), U.S. gasoline (+10 million), U.S. heating oil (+3 million) and European gasoil (+5 million).

Portfolio managers now hold a net bullish position in the six contracts equivalent to 865 million barrels, nearly three times higher than in early January, although still below the recent high of 1.099 billion in late September.

Long positions outnumber short ones by a margin of 7:1 across the petroleum complex but 13:1 in Brent and a record 39:1 in U.S. gasoline.

From a pure positioning perspective, the crude and especially gasoline markets appear very stretched, with lopsided positioning pointing to a future reversal in the upward price trend.

But the Trump administrations decision to eliminate all sanctions waivers for purchasers of Iranian oil is expected to tighten the market and could validate hedge fund bets on higher prices.

If fund managers choose to liquidate some of their existing long positions into a rising market, fund selling could help moderate the impact of tougher sanctions (a case of buy the rumour, sell the fact).

On the other hand, if the fund managers decide to add to their long positions, and they are still several hundred million barrels below last years peaks, it could prolong and even accelerate the rally (the trend is your friend).

RELATEDNewsletterTags :Oil & GasSaudi ArabiapetroleumNew York Mercantile ExchangeIranHedge fundBrent crudeComment on thisSubscribe to our Newsletters

ONGC to spend Rs 65,773 crore on ramping up production from 13 projects

The ongoing field development and EOR/IOR projects are expected to produce a cumulative of 54.6 million tonne (mt) of crude oil and 114 billion cubic meter (bcm) of natural gas in the next three to four years, the report said.

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2018 was the first time since 2001 that growth in renewable power capacity failed to increase year on year.

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ONGC to spend Rs 65,773 crore on ramping up production from 13 projects

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ONGC denies reports on financial mess within the company

ONGC to spend Rs 65,773 crore on ramping up production from 13 projects

Modis free cooking gas leaves bitter taste for some Indians

Cairn Oil & Gas projects Rs 58,521 crore investment to develop blocks awarded under OALP

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MNRE cancels 438 Mw hydro power proposals of 50-odd private companies/NTPC profit for 2018-19 jumps 20 per cent to Rs 12,633 crore/Jet Airways crisis: Indias aviation fuel consumption drops for the first time in 4 yrs/ONGC Videsh reports 71 per cent jump in net profit for 2018-19 at Rs 1,682 crore/Re-election of NDA will be credit neutral for oil and gas sector: ICRA/Election Results: Renewable energy industry expects govt to sharpen focus on policy stability/ADB to provide $750-mn loan to fund railway track electrification in India/ElectionResults: Power sector reforms – a new agenda for the new government/Indias oil imports jumped 14% in April, Iran shipments down 42%/India leading among developing nations in circular economy investments: Chatham House

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