Oil has hit a 15-month high on the back of optimism over the Opec deal which needs to be sorted out by November 30. But, with a record long position building across the combined benchmarks, a disappointment could leave some exposed. Full report to come within the hour....
Article / 15 August 2016 at 8:58 GMT

COT: Selling of metals, natgas drive seventh weekly reduction

Head of Commodity Strategy / Saxo Bank
  • Heavy-metal selling sees sector suffer first fall since end-May
  • Natural gas selloff helps seal seventh consecutive weekly reduction
  • Net shorts on WTI leave market exposed to short covering
  • Renewed verbal interventions keep oil buoyed


When the Saudis talk, the oil market frequently listens. Photo: iStock

By Ole Hansen

Heavy selling of metals, not least copper and gold, triggered the first weekly reduction in this sector since late May. The energy sector was mixed with selling of natural gas being more than offset by the first weekly rise in crude oil since July 12. 

Hedge funds scaled back commodity exposure for a seventh week with the net-long across 20 major commodities down 40% from the pre-Brexit high of 1.53 million lots.

Speculative positioning in Commodities

Commodity exposure remain elevated in platinum, sugar and cotton.

Speculative positioning in Commodities
WTI crude oil (NYMEX) buyers raised the net-long by 18% but the gross-short still hit a new record high leaving it very exposed to short-covering from the renewed verbal intervention, not only from Saudi Arabia on Thursday but also other major producers such as Russia. 

The Russian energy minister Novak has in an interview with Asharq Al-Awsat newspaper said that Russia is consulting with Saudi Arabia and that the door remains open to more discussions on production freeze if needed. 

Speculative positioning in WTI Crude oil
Bullish gold bets were reduced on a combination of reduced longs and increased number of shorts. A weaker dollar failed to lift gold last week but the reaction to the aftermath of weak US data on Friday has raised the risk of a deeper correction and additional long liquidation.

Speculative positioning in COMEX Gold futures
The platinum net-long almost eclipsed the record high from July 2014 and palladium rose for a seventh week. Both are now exposed to profit taking should gold falter.

Platinum and Palladium
Funds held a record exposure to soft commodities of more than 400k lots. This followed buying of sugar to a new record and a near record for cotton. The sector ended down more than 4% last week with long liquidation hitting both sugar and cotton. 

Speculative positioning in softs
 — Edited by Martin O'Rourke

Ole Hansen is head of commodities strategy at Saxo Bank

15 August
Ole Hansen Ole Hansen
Funds increased bullish crude oil bets by the most in 3 months last week. The WTI and Brent combined net-long jumped 48,406 lots to 389,096 lots
15 August
Market Predator Market Predator
Interesting to see Platinum&Palladium COT analysis and confront it with price chart.
21 August
AndrejLences AndrejLences
Very interesting article to me, because of the managed money positions charts. I would like to see more like this one. Great job.


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