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LONDON. — Hedge funds are becoming increasingly bullish on oil prices amid signs of slowing production growth as a result of output cuts by Saudi Arabia and a reduction in US shale drilling.

Hedge funds and other money managers bought 37 million barrels of futures and options in the six most important contracts linked to petroleum prices in the week to March 26.

Funds have boosted their bullish position in the six major contracts by a total of 421 million barrels over the last 11 weeks, according to position reports published by regulators and exchanges.

The fund community’s net long position has climbed to 723 million barrels, up from just 302 million barrels on January 8, though still well below the recent high of 1.099 billion barrels on September 25.

In the week to March 26, portfolio managers bought 29 million barrels of WTI-linked futures and options, taking total purchases to 158 million barrels since January 8.

Hedge funds also bought 13 million barrels of Brent contracts in the most recent week and have purchased a total of 186 million since  December 11 .

On the products side, investors were net buyers of 6 million barrels of US gasoline contracts, taking total purchases to 51 million barrels since the end of January.

But there was less enthusiasm for middle distillates such as US heating oil and European gas-oil, notwithstanding the introduction of new ship fuel regulations at the start of next year which should boost consumption.

Fund managers were net sellers of both heating oil (-5 million barrels) and gas-oil (-7 million barrels) last week.

Portfolio managers now hold an overall bearish short position in US heating oil; while they are still net long in gas-oil, the position has declined for two weeks running. — Reuters.