Oil: net position on the verge of falling into the abyss

The Commodity Futures Trading Commission (CFTC) COT (Commitments of Traders) reports for the week ending on Tuesday, April 28th, have been released by the CFTC.

Non-commercial large speculators increased their net buying position on oil contracts by 11.4 thousand contracts, bringing the total to 166.5 thousand. This was a reversal from the previous week's reduction, and the net position is now close to the lowest it has been since March 21.

The net position of Hedgers (COMMERCIAL) on oil contracts rose by 5.6 thousand to a total of 189.9 thousand contracts.

The number of open contracts decreased by 40 thousand, bringing the total to 1.847 million.

The ratio of the number of buy contracts to the number of sell contracts for the bullish index of large speculators increased by 0.17 to 1.95 over the week.

The COT oil data indicates a growing bullish sentiment among traders. They are attempting to increase their net position in response to rising prices, which are close to the lowest they have been since 2013. In the past week, large funds have reduced their sales by 12%. If this trend continues, it could lead to an increase in oil prices.

Large speculators are not buying, thus decreasing the likelihood of sustaining a net position that will not fail.

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 influence 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.