Oil: traders broke through the "bottom"

The CFTC's COT report for the week ending on Tuesday showed that:

Non-commercial large speculators decreased their net buying position on oil contracts by 28.1 thousand contracts, bringing it down to 138.4 thousand. Since mid-April, these large speculative players have been intermittently reducing their net buying position, which has now dropped below the March levels and is the lowest it has been since 2013.

Hedgers (COMMERCIAL) decreased their net position on the sale of oil contracts by 23.3 thousand contracts to a total of 166.7 thousand.

The open interest rose by 19 thousand contracts, bringing the total to 1.866 million.

The ratio of the number of buy contracts to the number of sell contracts for the bullish index of large speculators decreased by 0.26 over the course of the week, bringing it to 1.69.

The COT oil data shows a clear increase in bearish sentiment. Traders have been cutting their net position on rising prices for more than two months. This has caused the net position to drop below the levels of March and reach its lowest point since 2013. Large funds have increased their sales by 14% in the last week, while purchases have also decreased. If this trend continues, it could lead to a further decrease in oil prices.

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, do not have much of an effect on the market (red line). Hedgers, COMMERCIAL (operators, large companies), on the other hand, usually trade 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.