Oil: speculators increased sales by 19%

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

Non-commercial large speculators decreased their net buying position on oil contracts by 17.4 thousand contracts to 155.1 thousand. This follows a weekly increase, and marks the fifth time in the last eight weeks that they have reduced their net buying position. The net position is now close to the levels of March 21, the lowest it has been since 2013.

Hedgers (COMMERCIAL) decreased their net sell position on oil contracts by 14.1k contracts to 184.3k over the past 8 weeks, with a reduction in 6 of those weeks.

The number of open contracts decreased by 65 thousand, bringing the total to 1.887 million.

The ratio of the number of buy contracts to the number of sell contracts for the bullish index of large speculators decreased by 0.25 over the week, bringing it to 1.78.

After a week-long hiatus, traders resumed their bearish sentiment by reducing their net position on rising prices. This brought the net position to levels not seen since 2013, with March 21 being the lowest. Large funds further contributed to this sentiment by increasing their sales by 19% in a week. If this trend continues, it could lead to a decrease in oil prices.

Large speculators increased their purchases, and some of them did not exclude the possibility of prices rebounding from the lows of late May.

COT report data is essential for medium and long-term trading, and is mainly used by large speculators, NON-COMMERCIAL (banks, investment funds). These speculators usually trade in the same direction as the market (blue line). Small speculators, NONREPORTABLE POSITIONS, however, have little influence on the market (red line). Hedgers, COMMERCIAL (operators, large companies) usually trade in the opposite direction to the market (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.