Oil: bulls break through the "ceiling" of the net position in 2023

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

Non-commercial large speculators increased their net buying position on oil contracts by 14.1 thousand contracts to 255.9 thousand for the sixth consecutive week. This net position is higher than it was at the start of the year and is the highest it has been since November 15, 2022.

Hedgers (COMMERCIAL) have been steadily increasing their net sell position on oil contracts for the past six weeks, with the latest increase being 11.1 thousand contracts, bringing the total to 278.3 thousand.

The number of open contracts decreased by 48 thousand, bringing the total to 1.704 million.

The ratio of the number of buy contracts to the number of sell contracts for the bullish index of large speculators increased by 0.10 to 3.08 over the course of the week.

The data from the COT report indicates that traders are becoming increasingly bullish on oil prices. For the past six weeks, they have been increasing their net position as prices have risen from multi-year lows. This net position is now the highest it has been in almost nine months, and large funds have increased their purchases by 4% for the week. If this trend continues, it could lead to further growth in oil prices.

WTI

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 effect 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.