Sunday, May 8, 2011

CFTC C.O.T., Heating Oil Fundamentals, etc.

Most recent COT,   as of Tues May 3, released Fri. after the close ;
spec long Open Interest in Crude, Rbob, and Heating Oil was virtually unchanged. In fact, lumped together it actually increased slightly.
Charts from Reuters;
Note the jump in crude oil O.I. back in the last week of Feb. corresponds to the break up above 93, which was nearly all retraced last week.


click to enlarge

The above charts benefit from a little longer term context....compare current levels to July 2008.

click to enlarge
 above from Mish's Global Economics Trend Analysis' Oil Consumption Demand Destruction vs. Speculative Futures Positions
there are some excellent charts there re the worsening (to be kind) Distillate demand.
Here's one just to get the flavor;

So next weeks O.I. numbers will reflect the liquidation of last week. But given a number of factors including the prevalence of paired trades esp vs USD and the dollar carry trade (I mean was ANYONE long USD?), the historic O.I. levels, and horrible fundamental demand dynamics ...Probably fair to say there is  more to go.  

Added Mon. 8:45 a.m.
OK seeing that O.I. INCREASED Thur. confirming the move down's longer term significance, esp coupled with the huge volume. 
There will certainly come a time when the longs liquidate, AND get SHORT (if they're still viable) for now it appears there is a lot of pain yet to be realized out there.






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