As Trump 2.0 is about to begin, Fund managers are increasingly Bullish on oil.

Based on the commodities in the USA.Futures Trading Commission (CFTC)'s latest data shows that investors are significantly reducing their net short positions in US soybean, corn, and wheat contracts, easing bearish sentiment in the market.According to data from the CFTC, over the past three weeks, Funds have increased their long positions on Crude Oil by 41%, reaching 247,113 contracts. During the same period, short positions decreased by 33%—this brought net long positions to their highest level since last August.

Analysis indicates that algorithmic trading is one of the main driving forces behind this trend. After Crude Oil broke above the 100-day moving average last week, algorithmic trading Funds began to shift to a Call position.

For traders more focused on fundamentals, Trump's tough stance on Iran makes them hesitant to go short; Trump's potential tariff policies raising inflation concerns have also prompted traders to hedge risks by going long on Crude Oil.

The performance of the Crude Oil spot market remains very strong. Both WTI and Brent Crude Oil Futures show a backwardation structure with near-month contract prices higher than those of far-month contracts, indicating recent tight supply and providing investors with opportunities to profit by rolling contracts.

Greg Sharenow, head of Pimco's Commodity Investment Portfolio Management team, stated:

“(Crude Oil Product) prices are generally in line with our expectations, and the current yields make it a more easily held hedge against various risks, whether geopolitical or inflationary.”

Darwei Kung, head of commodities at DWS Group, stated:

“It remains unclear what actions the Trump administration will take. Most likely, as the market adjusts its expectations, we will experience a period of volatility.”