Hedge funds sold energy stocks last week at the fastest pace since September 2024 and at the second-quickest clip in the last 10 years, as oil prices fell on easing Middle East tensions, a Goldman Sachs note seen by Reuters on Monday showed.
Crude prices tumbled over $10 last week following a cease-fire between Israel and Iran. Oil prices wobbled on Friday on reports of increased supply from oil producing group OPEC+ and remain well below the recent peak of around $81.
Hedge funds, starting June 23, sold the stocks of energy-related companies across every major region, the Goldman note said.
Last week’s selling in the sector was the biggest in almost a year and the second largest in the last decade, said the Goldman note, sent to clients on Friday.
Shares of oil, gas and consumable oil companies as well as energy equipment and services firms were sold.
Hedge fund selling focused on every region but primarily on North America and Europe, said the note. In Europe, hedge funds added short positions and fled long bets, said Goldman.
A short position expects asset prices to fall, while a long position expects it to rise.
While many increased short bets against energy companies, speculators’ total combined positions remained proportionately long on global energy stocks, data from the note showed.
Hedge fund gross leverage, a gauge of how many positions hedge funds have on, remains at a five-year high, said Goldman Sachs.
Last week saw the largest stock buying in five weeks, the note added, with hedge funds buying company shares in every global region, the bank said.
Stock sectors most bought included financial, tech and industrial companies, it said.
(Reporting by Nell Mackenzie; Editing by Dhara Ranasinghe and Joe Bavier)