Oil squeezes higher as specs bet heavy against crude

We have seen this pattern several times recently: positioning data released late Friday shows a very negative situation in oil, and on Monday there will be bullish pressure.

But unfortunately, the gains didn’t last, at least not recently. There are already signs of that with WTI crude rising to $70.70 but now retreating to $69.79.

However, WTI crude rose $1.18 on the day, and net speculative long positions in U.S. crude futures and options hit an all-time low. Sellers are clearly betting on a slowing global economy and weak Chinese growth in particular as a catalyst.

Rory Johnson in commodity context The daily report highlights the lowest levels of sentiment since 2019 and finds that over the next 50 days, the average gain has been $8 per barrel.

Granted, these aren’t a lot of data points and they include Covid, but it’s something to consider.