Oil: a turning point on the horizon?

The Commodity Futures Trading Commission (CFTC) reported, for the week ending last Tuesday, that the Commitments of Traders (COT) reports showed.

For the tenth consecutive week, large speculators (NON-COMMERCIAL) decreased their net position to purchase oil contracts by 14.2 thousand contracts, bringing the total to 169 thousand - the lowest since July 3.

Hedger operators have been decreasing the net position for selling oil contracts for 8 weeks out of the last 9, with the most recent reduction being 12.2 thousand contracts, bringing the total to 194.6 thousand.

The open interest rose by 87 thousand contracts, bringing the total to 1.650 million.

The ratio of the number of contracts to buy to the number of contracts to sell for the bullish index of large speculators decreased by 0.14 over the week, bringing it to 1.94.

Data from COT oil reports indicate a growing bearish sentiment. Traders are not letting up and continue to reduce their net position even as prices rise. This has resulted in the net position reaching its lowest point in the past five months. Large speculators increased their sales by 7% over the week, while purchases were also reduced. If this trend continues, it could lead to a decrease in oil prices. The targets of large speculators may be the net position minimums from the beginning of July, which is around 140 thousand, and there is not much left to reach that point.

WTI

COT reporting data is essential for medium to long term trading. Large speculators, NON-COMMERCIAL (banks, investment funds) usually follow the trend (blue line). Small speculators, NONREPORTABLE POSITIONS, usually 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. Open interest is the total of all open positions in the market.