By Aaron Sheldrick
TOKYO (Reuters) - Crude futures rose for a second day on Tuesday, with data showing hedge funds are betting big across oil markets following OPEC production cuts agreed last year.
U.S. West Texas Intermediate crude was up 34 cents, or 0.6 percent, at $53.74 a barrel at 0733 GMT, after rising about 0.5 percent in a shortened session on Monday due to a U.S. national holiday.
Brent futures were up 14 cents at $56.32 a barrel, after gaining 0.7 percent on Monday.
Investors now hold more crude futures and options than at any time on record, after members of the Organization of the Petroleum Exporting Countries (OPEC) committed last year to cut production.
Speculators raised their bets on a rally in Brent oil prices to a record last week, data from the Intercontinental Exchange showed on Monday, mirroring the optimism in the U.S. crude market.
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Data on Friday showed net long U.S. crude futures and options positions in the week to Feb. 14 were at a record.
"I think this prolonged and increasing overcrowding of speculative net longs should be a cause for concern. Crude oil prices do not seem to be rising with this increase," said Jonathan Chan, an investment analyst at Phillip Futures in Singapore.
"Should there come a time when these speculative positions decide to unwind, oil prices will be in for a significant correction," he added.
Signs that OPEC's agreement is holding have been countered by data showing that U.S. crude oil and gasoline inventories soared to record highs last week as refineries cut output and gasoline demand softened.
The catalyst for a big market move could come from the next release of inventory numbers for U.S. oil and petroleum products, said Ben le Brun, a market analyst at OptionsXpress in Sydney.
"We are coming toward the top of the recent trading range," le Brun said. "It is going to be absolutely intriguing to see just which way it trends from here."
The oil market will have to wait until Thursday, a day later than normal, for the release of this week's official data, due to the holiday on Monday.
(Editing by Richard Pullin and Subhranshu Sahu)
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
