OIL SHORT: Commercial hedging at multi-year highs
Commercial hedging short interest is at multi-year highs - back to where it was in summer 2014 when oil topped at around $100.
Hedgers are locking in current prices as they believe they are extremely attractive in the medium term.
Speculative positions are also at multi-year highs - making oil prices prone to a downside squeeze.
WTI may have set in a near-term top and, although we could see $60 tested in the next few months, oil will continue to be pressured to the downside.
A stronger dollar, questions about OPEC compliance and weak global growth are all fundamental forces which support this view.
Hedgers are locking in current prices as they believe they are extremely attractive in the medium term.
Speculative positions are also at multi-year highs - making oil prices prone to a downside squeeze.
WTI may have set in a near-term top and, although we could see $60 tested in the next few months, oil will continue to be pressured to the downside.
A stronger dollar, questions about OPEC compliance and weak global growth are all fundamental forces which support this view.