COT: Funds cut oil long to 16-month low ahead of Opec+ U-turn
Head of Commodity Strategy
Summary: Leveraged funds cut bullish commodities bets by just 4% in the week to November 6. Continued heavy selling of crude oil and products were somewhat offset by a pickup in demand for metals and grains.
To download your copy of the Commitment of Traders: Commodities report for the week ending November 6, click here.
First, the reasons why we focus primarily on the behaviour of leveraged funds:
• They are likely to have tight stops and no underlying exposure that is being hedged.
• This makes them most reactive to changes in fundamental or technical price developments.
• It provides views about major trends but also helps to decipher when a reversal is looming.
In my latest webinar I spent the first part talking about the COT report and how to read the table below.
Saudi Arabia, under pressure from President Tump, raised production by 700,000 barrels/day between June and October said after the meeting that they would now reduce crude sales in December by 500,000 barrels/day. In response to the 20% drop since early October the Opec+ warned in a statement that a new strategy was needed and this has raised speculation about coordinated cuts in 2019.
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