(Bloomberg) -- Hedge funds haven’t been this disappointed by gasoline demand since the depths of the pandemic, with speculators slashing their net-bullish bets as the US summer driving season continues to underwhelm.
Money managers’ net-long position in gasoline futures fell by 9,001 lots to 22,158 in the week ended July 23, according to the Commodity Futures Trading Commission. That’s the lowest in four years, which bucks the traditional seasonal pattern of gasoline demand accelerating in the summer travel period. The funds held the biggest short-only position in about seven years.
Gasoline demand fell in the week ending July 23, according to the Energy Information Administration. Driving tapered off after the July 4 travel period, and Hurricane Beryl impeded exports, which contributed to a supply build.
To be sure, demand has since picked up, and stockpiles have dropped, indicating that the summer season could still have some steam left.
“It’s still summer driving season,” Rob Thummel, a portfolio manager at Tortoise Capital Advisors, said this week. “There’s still vacation. There could still be some good demand numbers over the next several weeks.”
Still, the last time hedge funds scaled back their net-bullish bets this far was in June 2020, in the midst of the pandemic when few travelers were able to hit the road.
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