Oil: net position close to 10-year bottom

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

After a weekly decrease, large speculators (NON-COMMERCIAL) increased their net buying position on oil contracts by 3 thousand contracts, bringing the total to 141.4 thousand. This marks the beginning of a growth in the net position from its lowest levels since 2013.

The net position of Hedgers (COMMERCIAL) on oil contracts rose by 3.5 thousand to a total of 170.1 thousand.

The open interest decreased by 50,000 contracts, bringing the total to 1,816,000.

The ratio of the number of buy contracts to the number of sell contracts for the bullish index of large speculators increased by 0.12 over the week, reaching a total of 1.81.

The data from COT oil reflects a growing bullish sentiment. After hitting its lowest point since 2013, traders began to increase their net position as prices rose. This net position has been minimal over the past decade, but its recent growth could potentially lead to an increase in oil prices.

It is advisable to wait for the data of the next report, which will be released in a week, to affirm the reversal of the net position.

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, 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, while open interest is the total of all open positions in the market.