Oil: growth over?

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 0.5 thousand contracts, bringing it down to 349.6 thousand. After increasing it for 11 of the last 13 weeks, these large speculative players slightly reduced their net position. This decline began from its peak since March 8, 2022.

.Hedger operators have been steadily increasing their net position for selling oil contracts for the past six weeks, and for 12 of the last 14 weeks. This week, the net position rose by 6.5 thousand contracts to 381.9 thousand, the highest it has been since March 15, 2022.

The number of open contracts rose by 37 thousand, bringing the total to 1.787 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 0.19 to 4.13 this week, due to a decrease in sales.

Data from the COT report indicates that large speculators have become slightly more bearish on oil prices. Funds have reduced their purchases and sales, resulting in a decrease in their net position as prices have risen. This trend has been ongoing for the past 19 months, and if it continues, it could lead to a decrease in oil prices.

If Hedgers and big speculators join forces next week, their combined net position on rising prices could reach new highs in a year and a half, potentially causing oil prices to plummet even further.

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 have little 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.