Article / 23 May 2016 at 16:12 GMT

COT: Crude net-long jumped last week as short base collapsed

Head of Commodity Strategy / Saxo Bank
  • Net-buying in all sectors except metals because of aggressive copper selling 
  • Sugar longs hit a new record high 
  • Crude oil net-long jumped by 14% on fresh buying and shorts being reduced 
  • Soybean sector continuing to see strong demand 
  • Gold net-long only seeing a small reduction despite headwinds from stronger USD 
 Most commodities shone last week but copper got hammered. Pic: iStock

By Ole Hansen

Hedge funds increased commodity bets by 3% to 1.15 million lots, a two-year high, during the week ending May 17. Net buying was seen across all sectors apart from metals due to a second week of aggressive copper selling. Sugar longs hit a new record while crude oil longs jumped as the short base continued to dwindle on both WTI and Brent. 

Speculative positioning in Commodities

Sugar longs hit a new record while crude oil longs jumped as the short base continued to dwindle on both WTI and Brent. 

Speculative positioning in Commodities

The combined net-long on WTI and Brent crude jumped 75 million barrels during the week where traders were chasing the $50 level.

Combined oil positioning
Brent crude in particular saw continued reduction of short positions. This resulted in the long/short ratio reaching a new record above 16, meaning for every short position there are currently more than 16 longs.

Speculative positioning in WTI Crude oil

– Edited by Clare MacCarthy

Ole Hansen is head of commodity strategy at Saxo Bank. His Twitter account was cited by MarketWatch as one that investors should follow in 2016.

Download document

Commitments of Traders: Commodities

fxtime fxtime
A 16:1 ratio seems more a tulip mania considering the increasing flotilla of crude stock holding. Whilst we have large outages on the world markets we aren't seeing a lift in the physical (deliverable) world demand curve imho.
Ole Hansen Ole Hansen
Hi fxtime. That is an increased risk that can not be ignored. The question right now is what will be the trigger? The seasonal inventory draw/increased refinery activity will provide support together with continued supply disruptions. On the other hand a halt to the slowdown in the weekly production estimates could send a scare through the (bull) market. Put options look like an interesting approach as a way of catching a potential wash-out as it may not become the focus before July.
fxtime fxtime
TOTALLY agree.....the safest route is via options. Straddle/Strangle OTM may be the safest but there are plenty of defined risk strategies available. Canada and Iran will likely be the quickest to fill supply disruptions as iran can soak any supply issues and Canada will soon return to its normal output...if the dollar increases its buying power we have another repricing effect too.


The Saxo Bank Group entities each provide execution-only service and access to permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on or as a result of the use of the Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer
- 沪ICP备13028953号-1

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail