Hedge funds have turned more pessimistic on oil as prices flirted with $40 a barrel for the first time since August. "The speculators keep trying to pick the bottom and keep getting burned," Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts, said by phone. Money managers’ short bets in West Texas Intermediate crude surged 21% in the week ended Nov. 10, according to data from the Commodity Futures Trading Commission. The net-long position dropped 16%. The release of the figures was delayed because of Veterans Day on Nov. 11. Oil inventories in developed countries have expanded to a record of almost 3 billion barrels because of massive supplies from both OPEC and non-OPEC producers, the International Energy Agency said in a report on Nov. 13. WTI slipped to the lowest level since August before the CFTC release Monday. Thirty-nine oil tankers are waiting near Galveston, Texas, up from 30 in May, according to vessel-tracking data compiled by Bloomberg. "There’s been concern about excess supply in the market for a while now and that’s been strengthened by the IEA report," Lynch said. WTI fell 7.7% in the report week on the New York Mercantile Exchange. Futures were down 0.1% at $41.68 a barrel at 11:48 a.m. in Singapore. Prices touched $40.06 on Monday, the least since Aug. 27, before rebounding to close 2.5% higher. Oil inventories surged because of increased global production, the Organization of Petroleum Exporting Countries said on Nov. 12. U.S. crude supplies rose to 487 million barrels as of Nov. 6, the highest for this time of year since 1930, the Energy Information Administration reported on Nov. 12. "We think the next few months will be very weak," Sarah Emerson, managing director of ESAI Energy Inc., a consulting company in Wakefield, Massachusetts, said by phone. "The market is focused on inventories. Prices shouldn’t rally in the coming year unless we have a disruption." Speculators’ net-long position in WTI dropped by 27,198 contracts to 144,854 futures and options, the biggest decline since the week ended July 21, CFTC data show. Shorts climbed by 23,766 contracts while longs decreased by 3,432. Brent Positions Traders increased their bullish stance in Brent crude to the highest level in a month during the period. Speculators raised Brent net-longs to 187,479 contracts, according to data from ICE Futures Europe. In other markets, net bearish wagers on U.S. ultra low sulfur diesel decreased 5.2% to 30,818 contracts. Diesel futures slipped 5.1% in the period to $1.4865 a gallon. Net bullish bets on Nymex gasoline fell 14% to 15,434. Futures dropped 5.8% in the period covered by the CFTC report to $1.3618 a gallon. Oil rose Monday after failing to drop below $40 as French fighter planes dropped bombs on Syria, heightening tensions in Europe and the Middle East in the wake of deadly terrorist attacks in Paris on Nov. 13. French President Francois Hollande vowed to boost security spending, limit constitutional protections and win a war against Islamic terrorism. "It doesn’t look like this will have any impact on oil supply," Tim Evans, an energy analyst at Citi Futures Perspective in New York, said by phone. "It’s hard to distinguish between the unstable mess we had in the Middle East on Thursday and what we are looking at today. The overriding concern in the market right now is excess supply."