LONDON: Hedge funds and other large speculators cut their bets on higher Brent crude oil and gasoil sharply in the week to July 22, IntercontinentalExchange Inc. said, following a big fall in prices.

The ICE said money managers reduced their net long futures and options positions in Brent by 34,786 contracts to 117,195, and at the same time cut their net long gasoil positions by 13,947 contracts to 20,604.

Net long Brent positions held by money managers are now less than half their record peak of 242,201 contracts in the week to June 24, while gasoil net longs are under a third of their total of 77,256 seen in the same week.

Brent crude oil hit a 10-month high above $115 per barrel on June 19 after insurgents swept across large parts of Iraq, raising worries over the security of oil supplies in the Middle East gulf.

But oil prices have collapsed since then and were trading at around $107.50 by 1100 GMT on Monday, having reached an intraday low under $105 a barrel earlier this month.

North Sea and West African physical crude markets are over supplied, traders and brokers say, with sellers discounting heavily in an effort to attract buyers such as oil refiners.

September Brent was down $1.20 at $107.19 a barrel by 1332 GMT.

US crude futures for September CLc1 dropped 80 cents to $101.29, after ending last week 1 percent lower.

North Sea crude oil cargoes for immediate lifting are trading at deep discounts to later barrels, more than $1.50 per barrel below the front futures month.

Michael Wittner, oil analyst at Societe Generale, said oversupply in the West African oil market was “a bearish sign“:

“Weak refining margins in all regions, including the US, argue that the situation won’t turn around quickly.”

Traders reported around 30 million unsold barrels of West African crude for lifting in August, and September cargoes were already becoming available, further depressing the market.

But global political tensions helped underpin oil prices.