trending Market Intelligence /marketintelligence/en/news-insights/trending/FOB2MTsTaiUtIX2BYBYe0A2 content
Log in to other products

Login to Market Intelligence Platform

 /


Looking for more?

Contact Us

Request a Demo

You're one step closer to unlocking our suite of comprehensive and robust tools.

Fill out the form so we can connect you to the right person.

If your company has a current subscription with S&P Global Market Intelligence, you can register as a new user for access to the platform(s) covered by your license at Market Intelligence platform or S&P Capital IQ.

  • First Name*
  • Last Name*
  • Business Email *
  • Phone *
  • Company Name *
  • City *
  • We generated a verification code for you

  • Enter verification Code here*

* Required

Thank you for your interest in S&P Global Market Intelligence! We noticed you've identified yourself as a student. Through existing partnerships with academic institutions around the globe, it's likely you already have access to our resources. Please contact your professors, library, or administrative staff to receive your student login.

At this time we are unable to offer free trials or product demonstrations directly to students. If you discover that our solutions are not available to you, we encourage you to advocate at your university for a best-in-class learning experience that will help you long after you've completed your degree. We apologize for any inconvenience this may cause.

In This List

New smart money short positions in crude oil could bolster correction

Essential Energy Insights - September, 2020

Rate case activity slips, COVID-19 proceedings remain at the forefront in August

Bull market leaves US utilities behind in August

Utilities, midstream reckon with energy transformation on the horizon


New smart money short positions in crude oil could bolster correction

Augustcrude oil futures have fallen more than $6.00/bbl from their high in earlyJune, and fresh data on so-called "smart money" positioning showsthat more weakness is potentially in store.

Datafrom the "Commitments of Traders" report published by the U.S.Commodity Futures Trading Commission on July 8 showed that managed moneytraders liquidated 7,246 contracts from their net long position to reach145,365 contracts in the week ended July 5. It was the smallest net long positionsince the week ended March 1.

SNL Image

Theliquidation took place through the addition of new short positions, whichincreased 9,485 contracts while long positions gained only 2,239. Oil pricesfell $1.25/bbl during the survey week.

"Nota very exciting market right now as both crude and propane seem content to justtrade in a small range," J.D. Buss, trading manager at Twin FeathersConsulting Inc., said. "Burgeoning inventory levels for both crude andproducts coupled with a possibility of an equity slowdown, seem to paint thepicture that the upside in crude could remain highly limited and that pricescould be resting in a range of $35 - $55/bbl."

Noncommercialaccounts cut their net long by 4,567 to reach 299,672 contracts. It was thesmallest net long since the week ended May 10. The reduction was made throughthe addition of 13,613 new short positions while longs added 9,046 contracts.

Noncommercialtraders include those that are large enough to meet minimum position thresholdsbut are not involved in hedging, while the managed money category includesthose who engage in futures trades on behalf of investment funds or clients.Both are widely followed by traders and are considered to be the "smartmoney," as their positioning can track or sometimes lead changes in pricetrends.

Innatural gas, the data were mixed and showed both short-covering and longliquidation. The activity could suggest that the rally that took place in Junemay continue to falter.

Managedmoney accounts added 2,241 contracts to their net short position to reach30,378. Longs fell more than shorts and lost 6,687 contracts compared to adecline of 4,446 positions for holders of shorts. Prices dropped 15.3 centsduring the survey week.

"Weatherforecasts suggest the week ending July 15 may be the 3rd hottest since late1993. At the same time, a fire and explosion at a processing plant reduced Gulfof Mexico supplies," analyst Kyle Cooper with IAF Advisors, said in anote. "[A]ny moderation in temps or evidence that natural gas has lostmarket share to coal as a result of the new pricing differentials may limitfurther upside."

Noncommercialtraders reduced their net short position mostly through short-covering in theweek ended July 5. The net short position was cut by 2,515 to reach 135,292contracts. Longs were reduced by 6,693 while shorts fell 9,208 contracts.

Market prices and includedindustry data are current as of the time of publication and are subject tochange. For more detailed market data, including SNL powerand naturalgas index prices, as well as forwardsand futures,visit SNL Energy's Commodities Pages.