Interesting COT report on Oil

Discussion in 'Commodity Futures' started by runningman, Jan 31, 2007.

  1. seems some top here for uso
    for a week +
    probabaly a good pick lower then 41
    seems want 57 area for march calls
  2. Trader200K


    Bernstein says in their "Ides of March" report to look for $40-$30 oil due to speculation creating a massive market distortion.


    The preceeding Net CommittmentOTraders graph showed the two big humps of speculator buying (that the commercials effectively sold short) .... May through August. The speculators have unwound about 8% of those positions in the last 4 weeks....with the presumably knowledgable commercial sector going further into long territory.

    It seems to me that even though there are 1.3MM contracts total out there now (almost 50% more than a year ago), speculators only control about 39% of them. Leaving the commercial hedgers holding 61%.

    Furthermore, speculators only hold about 210,000 contracts long (20% of the total long contracts. The commercials hold 823,000 long).

    I am not an experienced industry expert by any means, but at 1000bbls per contract, the speculators hold 210 millon barrels long. That ain't chopped liver.

    It seems then to come down to market price dynamics and the conditions and timing when the 210MM are sold. If they all try to sell next Wednesday, I could imagine a pretty healthy dip. On the other hand, the commercials bought went long about 100,000 contracts in January. I can also imagine that 210,000 being worked off in a couple of quarters without any noticable effect at all.

    Anybody care to comment about the likelyhood of the speculators' long position unwinding and driving oil to $30-$40?

    Best Regards,

  3. Trader200K


    My mistake....commercials only increased their long position by a net 35.000 long contracts. That would absorb a lot less of the speculator selling volume doing the Lemming Shuffle to the exits.

  4. perhaps this data ( CL ) would be more useful if one took into consideration the USO ( oil ETF ) and the WTI contract
    as well as the QM
  5. jjgallow


    any thoughts for this week?

    My guess is the commercial hedgers are very undecided right now...