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0.6% of open interest cut in oil specs - TDS

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Apr 10, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    In respect of the CFTC Commitment of Traders Report for the week ending April 5th and for the commodities sector, analysts at TD Securities explained that WTI crude oil specs cut their net long positions by a convincingly large 9.3k lots, which is equivalent to about 0.6% of open interest.

    Key Quotes:

    While investors continued to strap on new longs, they grew their short position by twice as much on concern that the oil price rally was getting ahead of the fundamentals. Indeed, given that prices migrated lower after hitting highs just over $40/bbl, the shorts turned out to be correct.

    Specs increased their silver short holdings by an aggressive 3.0k lots, which resulted in the net long holdings to drop by a large 1.9% of open interest. Following hawkish statements being issued by several Fed officials, money managers scaled back their net long holdings as they started to fear that a Fed rate hike may come as early as April, which would increase the cost of carrying zero-yielding assets such as silver.

    Sharp drops in US auto sales last month and concerns that the Chinese economy may continue to show weakness prompted money managers to sharply cut long palladium positions and very aggressively grow short positioning, which together cut net long exposure by a very large 6.7% of open interest. Traders feared that a more hawkish Fed and weaker demand may cause a sharp correction from recent highs."
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