Article / 01 February 2016 at 9:03 GMT

COT: Bullish oil bets jumped 35% last week on output cut hopes

Head of Commodity Strategy / Saxo Bank
  • Bullish bets on WTI surged 34%
  • Hedge funds net long in commodities
  • Strong buying in gold, copper and corn
  • Sugar selloff continued with longs reduced

By Ole Hansen

Money managers increased their bullish bets on WTI Crude oil by 34% during the week ending January 26. Commodities in general saw renewed demand as hedge funds turned net long for the first time in five weeks. Apart from oil strong buying was seen in gold, copper, corn while selling was concentrated in sugar as longs continued to be scaled back.

Speculative positioning in Commodities
The biggest change and the one that has attracted most of the attention today was the near 35% increase in bullish bets on WTI crude. This the biggest weekly percentage jump since 2010 was mostly driven by new buying as the table above shows. With the chance of a deal between Russia and Opec fading as fast as it emerged, the downside risk once again looks the greatest. 

Speculative positioning in WTI Crude oil
Gold's strong performance so far this year has attracted renewed interest from money managers. After holding a record short on December 29 four weeks of continuous buying has now taken that position to a three-month high.

Speculative positioning in COMEX Gold futures
Sugar's attraction continue to fade as the rally during the final quarter of 2015 has run its course for now. The net-long was cut by 23% on a combination of new selling and continued reduction in longs. This the day before the price broke support at 14 cents/lb last week and the subsequent collapse to 13 will further have reduced investor appetite. 

Speculative positioning in Sugar
Charts and tables attached

– Edited by Clare MacCarthy


Ole Hansen is head of commodity strategy at Saxo Bank

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Commitment of Traders: Commodities


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