Data from the exchanges covering the week ending August 4 shows a clear shift in market sentiment. Portfolio managers reduced their net long position in NYMEX WTI by 7,257 lots, bringing the total to 101,050. The retreat was even sharper in ICE Brent futures, where net long positions fell by 11%, or 20,361 lots, to 164,722.

Ole Hansen, head of commodity strategy at Saxo Bank, noted that the energy complex saw a 25,000-contract reduction in combined net longs, reversing a three-week trend of heavy buying. Analysts at ING pointed to a growing climate of caution among speculators, who appear hesitant to commit capital to a sustained rally. This pullback persists even as news of potential disruptions in the Strait of Hormuz remains unresolved. While prices saw a brief recovery early this week following regional security claims and Iranian diplomatic demands, the underlying data suggests that institutional investors lack the conviction to chase these fluctuations higher.