Oil: net position soars to 14-month highs

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 increased their net position to purchase oil contracts by 58.4 thousand contracts, bringing the total to 299.3 thousand. This marks the second consecutive week of increased net position buying, and 8 out of the last 10 weeks. The net position is now higher than it has been this year, and is the highest it has been since June 28, 2022.

Hedgers (COMMERCIAL) have seen a 48 thousand contract increase in their net position for the sale of oil contracts, bringing it up to 309 thousand. Over the last 10 weeks, hedger operators have increased their net position for sale 8 times.

The number of open contracts rose by 45 thousand, bringing the total to 1.703 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 0.92 over the course of the week, bringing it to a total of 3.96.

Data from the COT report indicates a strong bullish sentiment in the oil market. After a two-month buildup, including a two-week correction, traders have significantly increased their net position on rising prices. This has resulted in the net position breaking through the levels of the current year (after a false breakout on August 8) and becoming the highest it has been in the last 14 months. Large funds have increased their purchases by 12% over the week, while sales have also decreased. If this trend continues, it could lead to an increase 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 much 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.