Oil: have buyers capitulated?

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

For the fifth consecutive week, large speculators (NON-COMMERCIAL) decreased their net position to purchase oil contracts, bringing the total to 262.3 thousand contracts - the lowest since August 29. This represents a decrease of 38.5 thousand contracts.

For the past four weeks, hedgers (COMMERCIAL) have been decreasing their net position for selling oil contracts, with a decrease of 32.2 thousand contracts in the last week, bringing the total to 308.8 thousand.

The open interest rose by 43 thousand contracts, bringing the total to 1.671 million.

The ratio of the number of contracts to buy to the number of contracts to sell for the bullish index of large speculators decreased by 0.98 over the week, bringing it to 3.16.

Data from COT oil reports indicate a significant rise in bearish sentiment. Over the past week, large speculators have increased their net position reduction in response to rising prices; hedgers have also joined them after a week's hiatus. This has resulted in the net position reaching its lowest point in two months. Large speculators have increased their sales by 27% compared to the previous week, while purchases have also decreased. If this trend continues, it could lead to a decrease in oil prices.

WTI

COT reporting data is essential for medium to long term trading. Large speculators, NON-COMMERCIAL (banks, investment funds), usually trade in line with the trend (blue line). Small speculators, NONREPORTABLE POSITIONS, generally do not have a major impact on the market (red line). Hedgers, COMMERCIAL (operators, large companies), usually trade 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.