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WTI Crude Oil Speculators Raised Bullish Bets Again

By Zachary StorellaCommoditiesNov 22, 2020 01:03AM ET
www.investing.com/analysis/wti-crude-oil-speculators-raised-their-bullish-bets-for-2nd-week-200545402
WTI Crude Oil Speculators Raised Bullish Bets Again
By Zachary Storella   |  Nov 22, 2020 01:03AM ET
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WTI Crude Oil Non-Commercial Speculator Positions:

Large energy speculators sharply raised their bullish net positions in the WTI Crude Oil futures markets this week, according to the latest Commitment of Traders (COT) data released by the Commodity Futures Trading Commission (CFTC) on Friday.

The non-commercial futures contracts of WTI Crude Oil futures, traded by large speculators and hedge funds, totaled a net position of 480,811 contracts in the data reported through November 17th. This was a weekly gain of 17,273 net contracts from the previous week which had a total of 463,538 net contracts.

The week’s net position was the result of the gross bullish position (longs) ascending by 4,502 contracts (to a weekly total of 638,245 contracts) while the gross bearish position (shorts) dropped by -12,771 contracts for the week (to a total of 157,434 contracts).

Crude oil speculators sharply raised their bullish positions for a second straight week and by a total of +38,351 contracts in these past two weeks. The crude bullish bets have gained for five out of the past seven weeks as well. This recent bullishness has pushed the speculator sentiment to its second highest level of the past eleven weeks at over +480,000 contracts. The current standing, however, remains under the +500,000 net contract level for a twelfth straight week following a twenty-week streak where bullish bets had stayed above that threshold through August 25th.

The large speculators' Strength Index level, the current score for traders compared to levels of the past three years, shows that specs are currently at a Bearish level with a score of 44.1 percent.

WTI Crude Oil Speculators Index
WTI Crude Oil Speculators Index

Speculators Trader Data
Speculators Trader Data

Speculators are seen as trend followers and usually trade in tandem with the price direction (blue line in above chart). At the extreme levels, specs are very important to watch as they have a tendency to bet the wrong way (that the trend will continue to even more extreme levels).

Current Trader Positions as Percent of Open Interest:

Current Trader Positions as Percent of Open Interest
Current Trader Positions as Percent of Open Interest

Commercial Trader Positions:

The commercial traders' position this week came in at a total net position of -504,036 contracts. This was a weekly change of -18,543 contracts from the total net of -485,493 contracts reported the previous week.

The commercials Strength Index level, a score that measures the contract levels of the past three years within a range of 0 to 100, shows that Commercials are currently at a Bullish level with a score of 53.3 percent.

WTI Crude Oil Commercials Strength Index
WTI Crude Oil Commercials Strength Index

At the extreme levels, commercials are very important to watch as they have a tendency to be correct at the major turning points in price trends.

Commercials Trader Data.
Commercials Trader Data.

Small Trader Positions:

The small traders' position this week totaled a net position of 23,225 contracts. This was a weekly change of 1,270 contracts from the total net of 21,955 contracts reported the previous week.

The small traders' Strength Index level shows that smalls are currently at a Bullish level with a score of 56.1 percent.

WTI Crude Oil Small Traders Strength Index
WTI Crude Oil Small Traders Strength Index

Small traders are less important to watch (in most cases) as their numbers tend to be just a small part of the total trading open interest.

Small Traders Data
Small Traders Data

WTI Crude Oil Speculators Raised Bullish Bets Again
 

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WTI Crude Oil Speculators Raised Bullish Bets Again

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