Oil: bulls confirm reversal?

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

For the second week in a row, large speculators (NON-COMMERCIAL) have increased their net position to purchase oil contracts, rising from 182.8 thousand contracts to 199.3 thousand. This is the highest level since July 3, when the net position was at its lowest point in 11 weeks.

Hedgers (COMMERCIAL) increased their net position to sell oil contracts for the second week in a row, this time by 15.2 thousand contracts to 211.1 thousand.

The open interest decreased by 25,000 contracts, bringing the total to 1.555 million.

The ratio of the number of contracts to buy to the number of contracts to sell for the bullish index of large speculators rose by 0.21 to 2.41 over the course of the week.

Data from COT oil reports indicate a growing bullish sentiment. For the second week in a row, traders have been increasing their net position on prices that have risen from their lowest levels in nearly six months. Additionally, the net position has reached its highest point in the past month. Large speculators decreased their sales by 7% over the week, while purchases were also increased. If this trend continues, it could lead to an increase in oil prices.

WTI

COT reporting data is essential for medium to long term trading. Generally, large speculators, NON-COMMERCIAL (banks, investment funds) tend to follow the trend (blue line). On the other hand, small speculators, NONREPORTABLE POSITIONS, usually do not have a major 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.