Oil: bulls wake up after three months of hibernation

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

Non-commercial large speculators increased their net buying position on oil contracts by 32 thousand contracts to 173.4 thousand for the second consecutive week. This net position has been steadily rising since reaching its lowest levels since 2013.

Hedgers (COMMERCIAL) increased their net sell position on oil contracts for the second week in a row, this time by 26.5 thousand contracts to 196.7 thousand.

The open interest decreased by 20,000 contracts, bringing the total to 1.796 million.

The ratio of the number of buy contracts to the number of sell contracts for the bullish index of large speculators increased by 0.24 over the week, reaching a total of 2.05.

The latest COT data for oil shows a significant increase in bullish sentiment. Traders have been increasing their net position in anticipation of rising prices. This is a continuation of the trend from multi-year lows, with large funds increasing their purchases by 7% and reducing their sales. If this trend continues, it could lead to an increase 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, do not have much of an 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, while open interest is the total of all open positions in the market.