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

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
Market Predator Market Predator
Interesting to see Platinum&Palladium COT analysis and confront it with price chart.
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.


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