(John Kemp is a Reuters market analyst. The views expressed are his own)

LONDON- Hedge funds purchased crude after disruption to offshore production in the Gulf of Mexico lasted longer than expected, extending a drawdown of already-tight petroleum inventories.

In the week to Sept. 14, hedge funds and other money managers purchased the equivalent of 41 million barrels in the six most important petroleum futures and options contracts, according to exchange and regulatory data.

Purchases have totalled 116 million barrels over the last three weeks as a result of Hurricane Ida, partially reversing sales of 268 million barrels over the previous 10 weeks as a result of the resurgent coronavirus epidemic.

Last week’s buying was concentrated in NYMEX and ICE WTI (+27 million barrels) and to a lesser extent Brent (+19 million).

There were smaller purchases in U.S. gasoline (+3 million) but sales of U.S. diesel (-7 million) and European gasoil (-2 million).

Most of the adjustment came from creation of new bullish long positions (+37 million barrels) rather than closure of previous bearish short ones (-3 million), consistent with hurricane-induced output losses.

Ida had already resulted in the loss of more than 20 million barrels of production by Sept. 10, with a corresponding reduction in U.S. petroleum inventories, according to the U.S. Energy Information Administration.

Commercial inventories outside the strategic petroleum reserve had fallen to their lowest level for the time of year since 2014.

Ida extended and accelerated the reduction in inventories already occurring despite the resurgence of coronavirus infections over the summer.

As a result, portfolio managers have started to rebuild their highly bullish positioning, after moderating it between June and late August.

The combined position across all six contracts climbed to 793 million barrels (72nd percentile for all weeks since 2013), up from a recent low of 677 million (59th percentile) on Aug. 24.

The ratio of bullish long positions to bearish short ones has risen to 5.68:1 (77th percentile) from 4.25:1 (58th percentile) on Aug. 24.

Bullishness remains high but not exceptional. Bearishness towards oil has evaporated almost entirely, with the total number of short positions across the six contracts at the lowest level since December 2019, as the hurricane-related output losses eliminated any risk of a coronavirus-driven stock build.

John Kemp

(Editing by Emelia Sithole-Matarise) ((john.kemp@thomsonreuters.com))