Oil: speculators increased sales by 25%

The Commodity Futures Trading Commission (CFTC) COT (Commitments of Traders) reports for the week ending on Tuesday last week showed:

Non-commercial large speculators decreased their net buy position on oil contracts by 21.6 thousand contracts, bringing it down to 214.8 thousand. This marks the second week of decline after four weeks of buildup, and the net position is now lower than it has been since January 24th.

Hedgers (COMMERCIAL) decreased their net selling position on oil contracts by 18.3 thousand contracts to 252.9 thousand. This marks the second consecutive week that hedgers-operators have reduced their net selling position. The net position has been decreasing since reaching its peak on November 22.

The number of open contracts rose by 82 thousand, bringing the total to 1.908 million.

The ratio of the number of buy contracts to the number of sell contracts for the bullish index of large speculators decreased by 0.74 over the week, bringing it down to 2.97.

The latest COT oil data shows a growing bearish sentiment among traders. In the last week, the net position on rising prices was reduced even further, and the net position has been declining from its peak levels over the past few months. Large funds have increased their sales by 25% in the same period. If this trend continues, it could lead to a further decrease in oil prices.

COT report data is essential for medium and long-term trading, and is mainly used by large speculators, NON-COMMERCIAL (banks, investment funds). These traders usually follow the trend (blue line). Small speculators, NONREPORTABLE POSITIONS, however, have little impact on the market (red line). Hedgers, COMMERCIAL (operators, large companies) usually go against the trend (black line). The net position is the difference between the number of buy and sell contracts, while open interest is the total of all open positions in the market.