Article / 26 September 2016 at 7:22 GMT

COT: Short-selling of oil jumps ahead of Algiers meeting

Head of Commodity Strategy / Saxo Bank
Denmark
  • Bullish commodity bets cut by 4%
  • WTI, oil and gold all heavily sold
  • Buying in HG copper, sugar and natural gas

By Ole Hansen

Hedge funds reduced bullish commodity bets by 4% during the week ending September 20 with heavy selling of WTI crude oil, gold and corn more than offsetting buying of HG copper, sugar and not least natural gas.

Speculative positioning in Commodities
 
Gold net-long reduced for a second week ahead of Bank of Japan and Federal Open Market Committee meetings. Buying fatigue has been seen in both futures and the ETP market following three months of range-bound trading. Since hitting a record on July 5 the net-long has so far been reduced by just 24% compared to the one-third reduction witnessed during the May correction.

Speculative positioning in COMEX Gold futures
 
Rising supply from Nigeria, Libya and Russia triggered a sizable reduction in bullish bets on WTI crude oil futures. This was not least driven by a 50% jump in the gross-short position. Oil has been sold in three out of the last four weeks during which time the net-long has slumped by 40%. Hopes that the Algiers meeting this week will trigger a price supporting deal have also been fading.

Speculative positioning in WTI Crude oil
 
After hitting a near-record short three weeks ago copper sellers were forced to cover short positions last week on bullish economic news out of China. A limited amount of fresh buying has been seen with the bulk of the net-short position being driven by short-covering.

Speculative positioning in HG Copper
 
Funds continue to be rewarded for their months long attraction to sugar. The surge to a new four year high last week supported a 6% jump in bullish bets which are now almost back record territory

Speculative positioning in Sugar
 
– 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

26 September
Ole Hansen Ole Hansen
Funds cut combined bullish bets on oil by 105k lots last week ahead of OPEC meeting. Second biggest weekly reduction since at least 2011
26 September
Ole Hansen Ole Hansen
Funds cut bullish Brent crude oil bets by 13% to 6-week low as of Sept 20. Longs cut while new shorts were added
Relevant articles for you

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Tradingfloor.com 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 Tradingfloor.com 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 Tradingfloor.com 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 Tradingfloor.com or as a result of the use of the Tradingfloor.com. 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 Tradingfloor.com your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. Tradingfloor.com 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

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