(Repeats without change. John Kemp is a Reuters market analyst. The views expressed are his own)

* Chartbook: tmsnrt.rs/2rFWRdl

By John Kemp

LONDON, May 14 (Reuters) – Hedge funds have continued to pare their bullish positions in petroleum despite the continued rise in prices and the prospect of renewed sanctions reducing exports from Iran.

The net long position of hedge funds and other money managers in the six most important petroleum futures and options contracts was cut by a further 21 million barrels in the week to May 8.

The combined net long has now been reduced by a total of 55 million barrels in the three most recent weeks, according to position reports published by regulators and exchanges.

As in previous weeks, the liquidation last week was concentrated in crude, while funds’ exposure to refined products was increased slightly (tmsnrt.rs/2rFWRdl).

Portfolio managers cut their net long position in NYMEX and ICE WTI (-9 million barrels) and Brent (-22 million barrels) for a third and fourth week respectively.

By contrast, net long positions were increased slightly in U.S. gasoline (+1 million barrels), U.S. heating oil (+7 million barrels) and European gasoil (+2 million barrels).

For all the bullish commentary around the outlook for oil prices, fund managers appear to be taking profits after a strong rally in crude oil rather than adding new positions.

Even the threat of tough sanctions on Iran’s crude exports does not seem to have encouraged funds to increase their exposure to oil.

The exception is middle distillates, such as diesel and heating oil, where global consumption is growing fast, inventories are declining and the market is looking increasingly tight.

Fund positioning remains stretched, with longs outnumbering shorts by 12:1 across the whole petroleum complex and by as much as 14:1 in the case of Brent.

While fundamentals still appear supportive, higher oil prices are likely to restrain consumption growth and stimulate more supply in the second half of 2018 and into 2019.

Against this backdrop, the extremely lopsided positioning could become a significant source of downside risk if and when portfolio managers try to exit some of their positions.

As a result, most managers appear to be looking to lock in some profits after an extraordinary bull run in which oil prices have risen by 75 percent since June 2017.

Related columns:

– Hedge funds hold fire as oil prices hit multi-year highs, Reuters, May 8

– Hedge funds trim positions in crude but boost fuels, Reuters, April 30

– Hedge funds build record bullish position in Brent, Reuters, April 16 (Editing by David Goodman)