The Suncor Energy refinery in Denver June 12, 2006. The refinery converts crude oil to many products including gasoline. REUTERS/Rick Wilking/File PhotoRegister now for FREE unlimited access to Reuters.comLONDON, Aug 1 (Reuters) - Portfolio managers were heavy buyers of U.S. distillates last week, reflecting the continued shortage of diesel and heating oil despite signs of an economic slowdown.Hedge funds and other money managers purchased the equivalent of 4 million barrels in the six most important petroleum futures and options contracts in the week to July 26Purchases of Brent (+12 million barrels) and U.S. gasoline (+1 million) were offset by sales of NYMEX and ICE WTI (-17 million) and European gas oil (-1 million).Register now for FREE unlimited access to Reuters.comBut the most significant change was buying of U.S. diesel (+9 million barrels), which funds purchased at the fastest rate since November 2020 (https://tmsnrt.rs/3JiCMk0).It coincided with ongoing shortages of the fuel used by freight firms, manufacturers, farmers, miners and oil and gas companies themselves.Distillate fuel oil inventories are rebuilding slowly despite the ramp up in crude processing activity during peak summer gasoline demand season.Overall, distillate inventories have fallen since late June especially on the East Coast, which includes the delivery point for the NYMEX diesel contract in New York Harbor.Related columns:- Low U.S. oil inventories imply deeper economic slowdown will be needed (Reuters, July 28) read more - Bargain-hunting hedge funds boost oil positions (Reuters, July 25) read more - Oil positions steady after heavy hedge fund selling ends (Reuters, July 18) read more - Oil dumped by hedge funds on heightened recession risk (Reuters, July 11) read more John Kemp is a Reuters market analyst. The views expressed are his ownRegister now for FREE unlimited access to Reuters.comEditing by David Goodman and Barbara LewisOur Standards: The Thomson Reuters Trust Principles.Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
Column: Hedge funds bullish on U.S. diesel as inventories dwindle: Kemp.