(John Kemp is a Reuters market analyst. The views expressed are his own) LONDON, July 26 (Reuters) - Portfolio managers sold petroleum last week at one of the fastest rates for a decade, after an upsurge in coronavirus cases and an OPEC+ agreement to boost output caused them to reassess the likelihood of further price increases. Hedge funds and other money managers sold the equivalent of 172 million barrels in the six most important futures and options contracts in the week to July 20, the fastest rate since July 2018 (tmsnrt.rs/3iL9lu8). The sales volume was the sixth highest out of more than 430 weeks since early 2013, according to records published by ICE Futures Europe and the U.S. Commodity Futures Trading Commission. In the most recent week, funds sold NYMEX and ICE WTI (-74 million barrels), Brent (-51 million), European gas oil (-26 million), U.S. gasoline (-20 million) and U.S. diesel (-1 million). As a result, the combined position across all six contracts fell to just 729 million barrels (in the 67th percentile for all weeks since 2013) while the ratio of long to short positions dropped to 4.50:1 (61st percentile). Five weeks ago, the combined position was as high as 945 million barrels (85th percentile) and the ratio stood at 6.06:1 (80th percentile). Much of the bullish sentiment and hedge fund position-building that helped push Brent towards a multi-year high of $78 per barrel earlier this month has since ebbed away. Coronavirus infections are rising across much of North America, Europe and Asia, pushing back the anticipated recovery of passenger aviation, especially fuel-hunrgy long-distance intercontinental flights. OPEC members and allies, collectively known as OPEC+, have resolved a disagreement about production baselines, which had been holding up an agreement on increasing production later in 2021 and into 2022. Prior to last week’s massive liquidation, Brent prices had already stopped rising and hedge funds had sold petroleum in the three of the previous four weeks, signalling the rally had run out of momentum. With fewer reasons to stay bullish in the short term, many fund managers decided to realise profits from the earlier rally by selling at least some of their long positions. Portfolio managers sold 153 million barrels of existing bullish long positions in the latest week while initiating only 18 million barrels of new bearish short ones. The massive sales have skimmed the froth off the top of the market, bringing Brent prices back close to their long-run inflation adjusted average, and within the current equilibrium range of $70 +/- $5. Related columns: - Lower oil prices prompt hedge fund short-covering (Reuters, July 19) - Oil prices anticipate increase in production (Reuters, July 16) - Hedge funds took profits as U.S. oil price hit highest in more than six years (Reuters, July 12) - Hedge funds await OPEC+ oil output decision (Reuters, July 5) (Editing by David Evans) Our Standards: The Thomson Reuters Trust Principles.