Oil: bears are not relenting their grip

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

Non-commercial large speculators decreased their net position to purchase oil contracts by 20.2 thousand contracts, bringing the total to 215.7 thousand. This marks the seventh consecutive week that these large speculative players have reduced their net position, and is the lowest it has been since July 18.

Hedger operators have been decreasing the net position for the sale of oil contracts over the last 6 weeks, with a total reduction of 30 thousand contracts, bringing the total to 246.8 thousand.

The number of open contracts decreased by 49 thousand, bringing the total to 1.639 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 from 2.63 to 2.45 over the week.

Data from the COT report indicates a growing bearish sentiment among traders. Over the past three weeks, traders have significantly decreased their net position as prices have risen. This has resulted in the net position reaching its lowest point in the last four months. Large funds have reduced their purchases by 4.4% for the week, while sales have also increased. If this trend continues, it could lead to a decrease in oil prices.

WTI

The most recent COT report was postponed due to US holidays. COT reporting data is essential and is mainly used for medium to long-term trading. Generally, large speculators, NON-COMMERCIAL (banks, investment funds) trade in the same direction as the trend (blue line). On the other hand, small speculators, NONREPORTABLE POSITIONS, usually do not have a great impact on the market (red line). Hedgers, COMMERCIAL (operators, large companies) usually trade 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.