30.06.202511:14 Analisis Forex & Kajian: Hedge funds sell energy at record pace - what are they afraid of?

Oil Prices Tumble as Markets React to Middle East Truce and OPEC+ Moves

Crude oil prices saw a sharp decline of over 10 dollars last week following the ceasefire agreement between Israel and Iran. Volatility persisted into Friday amid reports of increased production from OPEC+, keeping prices well below the recent high of approximately 81 dollars per barrel.

Hedge Funds Trigger Massive Sell-Off in Energy Stocks

Starting June 23, hedge funds began aggressively offloading shares of energy companies across all major markets, according to a note Goldman Sachs sent to its clients on Friday. The sell-off was the largest in nearly a year and the second-largest in the past decade.

Shares of oil, gas, and energy equipment and service companies were among those most heavily impacted. The selling was widespread but most intense in North America and Europe. In Europe specifically, hedge funds significantly increased short positions while scaling back long bets—an indication they expect further price declines.

Mixed Signals: Shorts Are Rising, But Long Positions Still Dominate

While short-selling activity has grown, the overall balance of positions in energy stocks remains tilted toward the long side. This suggests that market participants remain divided—some betting on further losses, others anticipating a rebound.

Goldman Sachs also pointed out that hedge fund gross leverage, a measure of total market exposure, is currently at its highest level in five years. Despite the widespread selling, the past week marked the largest round of equity purchases in five weeks, as funds selectively re-enter global markets in search of opportunity.

European Markets Edge Higher Amid Trade Talks and Policy Shifts

European stock markets opened the week on a positive note, buoyed by renewed optimism over global trade developments. As of 07:14 GMT, the pan-European STOXX 600 index was up 0.2 percent at 544.47 points, though it remains on track for a monthly decline. Other major regional indices also showed upward momentum.

Investor Focus Shifts to Financials, Tech, and Industrials

Market participants showed growing interest in financial, technology, and industrial stocks, with these sectors seeing the most significant buying activity in recent sessions, according to analysts.

Hopeful Signals in Global Trade Landscape

Last week, hopes for progress in US trade relations were reignited as tensions between the United States and China appeared to ease. Further optimism came after Canada announced on Sunday the withdrawal of its digital services tax, a move aimed at reviving stalled negotiations with the United States. In the UK, officials confirmed that a trade agreement reducing tariffs on British-made vehicles and aerospace components had officially taken effect. However, tariffs on steel and aluminum remain unresolved.

Defense Sector Leads the Gains

Among the standout performers were European defense stocks, which collectively rose by nearly 1 percent. Shares of STMicroelectronics climbed 2.6 percent after J.P. Morgan added the Franco-Italian chipmaker to its watchlist, citing a favorable outlook and upcoming positive catalysts.

Markets Await Key Inflation Reports from Germany and Italy

Investors are also bracing for important inflation figures from Germany and Italy, expected later today. These data points could influence investor sentiment and central bank policy expectations in the days ahead.