Oil: bulls resumed offensive

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 position to purchase oil contracts by 6.5 thousand, bringing the total to 240.9 thousand. This follows a two-week period of reduction, and the net position is now approaching its highest level since November 15, 2022.

Hedgers (COMMERCIAL) upped their net sell position on oil contracts by 4.6k contracts to 260.9k, following a 2-week decline. This marks an increase in the hedger operators' net sell position.

The open interest rose by 35,000 contracts, bringing the total to 1,659,000.

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 3.04 over the course of the week.

The COT oil data indicates a growing bullish sentiment. After a two-week hiatus, traders resumed increasing their net position in response to rising prices. This has caused the net position to reach levels not seen in the past 9.5 months. Large funds have reduced their sales by 8% in the last week. If this trend continues, it could lead to a further increase in oil prices.

Large speculators were wary and avoided purchasing near the multi-month highs of 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, do not have much of an 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.