Tags: oil | speculators | long | price

Bullish Sentiment Toward Oil Continues to Slip

By    |   Tuesday, 16 Sep 2014 08:06 AM

Large speculators have been trimming their bullish bets on oil for the last 2 ½ months.

This past week's Commitment of Traders report showed that the group is net long 299,982 contracts. This is the first time since last November that the group has been long fewer than 300,000 contracts.

The price of oil has fallen in 10 of the last 13 weeks. Think about that . . . 13 weeks is one quarter of a year, and the price of oil has fallen in all but three of the last 13 weeks.

Oil went through a similar period last fall when the price fell in 10 of 13 weeks from September through November. This was the same period where the large speculators were long fewer than 300,000 contracts for the last time.

After reversing from the 13-week swoon, the price of oil bounced higher for four weeks and then dropped lower to form a double-bottom pattern right at the end of 2013. After the double-bottom pattern, oil prices rose more than 18 percent in the next six months.

I look for oil prices to rebound during the next few quarters, much like it did in the first half of 2014. As it rebounds, look for the large speculators to add to their long position.

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Large speculators have been trimming their bullish bets on oil for the last 2 ½ months.
oil, speculators, long, price
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2014-06-16
Tuesday, 16 Sep 2014 08:06 AM
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