Sounds logical only catch is the Saudi minister warning speculators to not short the market they might manipulate sometimes just to prove that point


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Catching up on some Morningstar Analysis Reports...

8-Jun | What Happens if U.S. Crude Exports Dry Up?
https://research-reports.morningstarcommodity.com/reportpdf/what-happens-if-us-crude-exports-dry-up-FINAL.pdf
General discussion on US Fundamentals. Little old now. (Sorry).

15-Jun | Oil Industry Laments Jones Act Centenary
https://research-reports.morningstarcommodity.com/reportpdf/oil-industry-laments-jones-act-centenary-FINAL.pdf
The Jones act requires all waterbourne shipments from a US port to another US port to be conducted by a US Flagged ship. This requirement increases the cost of these shipments. General discussion of the impact of this.

22-Jun | Crude Pipeline Developers Hit the Brakes
https://research-reports.morningstarcommodity.com/reportpdf/crude-pipeline-developers-hit-the-brakes-FINAL.pdf
Less interesting. Discusses announced delays in pipeline projects since production has dipped.

3-Aug | U.S. Crude Fundamentals Move On From Cushing
https://research-reports.morningstarcommodity.com/reportpdf/u-s-crude-fundamentals-move-on-from-cushing-FINAL.pdf
Analysis of Padd II (Cushing) and Padd III (Gulf Coast) fundamentals and how they have changed from 2010 to 2019



And the CME's most recent explanation as to why Cushing, and hence their Benchmark WTI contract, is still relevant.

CME :- Why Cushing Matters: An Update on the WTI Benchmark
https://www.cmegroup.com/education/articles-and-reports/why-cushing-matters-a-look-at-the-wti-benchmark.html

Mozart2112 

CL approaching 42 an all important level for support and resistance. I'm using a daily time frame. My inclination is to put on a short position if price action confirms. Curious how many of you would do this trade or take the other side ? thanks for any feedback.

jokertrader 

Sounds logical only catch is the Saudi minister warning speculators to not short the market they might manipulate sometimes just to prove that point

Two of John Kemps charts from his daily Best In Energy.

I was wondering if you could tell me how to read the 2nd chart :-)

@Tiffsgreta I believe each line represents a 'cycle of shorting selling' based upon the Commitment of Traders data. The x-axis is the length of the cycle in weeks while the y-axis is number of short contracts. Hence the red line represents the current cycle which started 16-17 weeks ago and was increasing in size until the previous week.

So looks like last year by week 5 after Sept 17,2019 short positions were reduced until about early Jan
Then Short positions increased and stayed low through the low in mid March until mid April.. around week 14 or 15 (Orange line) and then increased
So current cycle (red line): Short positions increased until last week (this is what SMCJB just pointed out)

but if last year is any indication, then they might reduce short positions until end of the year and then add on again

From second chart, looks like at where we are today (i.e about 100,000 thousand barrels short), the expected price is about mid 40s (regression line).. so we might be a tad under value from a historical perspective.. which if the above statement holds true, then price could catch up to mid 40s

Now looking at price
last year from mid Oct to end of the year was about a 10 buck rise (same when orange line was about -50,000 barrels i.e. from mid April to mid May was about a 10 buck rise)

So one can extrapolate (if i am correct with my assumption), that oil might rise to upper 40s IF money managers continue to lighten up on their shorts based on last year's performance

BUT this being a COVID year.. and supply/demand whacky..i dont think this is scientific by any means !!!!

SMCJB 

@Tiffsgreta I believe each line represents a 'cycle of shorting selling' based upon the Commitment of Traders data. The x-axis is the length of the cycle in weeks while the y-axis is number of short contracts. Hence the red line represents the current cycle which started 16-17 weeks ago and was increasing in size until the previous week.

I really appreciate your answer One more question if I May ask what do the scatter squares on the chart represent?

Sorry @Tiffsgreta you asked about the 2nd chart and then I explained the 1st one!

The second chart is showing the relationship between Commitment of Traders Money Managers position and the price of prompt month wti. So this chart kind of shows that the more negative Money Managers are (ie the bigger their short position) the lower crude oil prices tend to be. Each dot/square represents the data for a week. (CoT data is only published weekly). I presume the dots connected by the orange line represent "cycle 15' of the current short selling cycle, with the red line showing the most recent weeks move.

NOVEMBER CRUDE OIL MARGINS DOWN $400 EFFECTIVE WEDNESDAY 7TH OCTOBER

Maintenance margin as follows (Initial Margins, ie non-member rates will be 110% of these)
Tier 1 / Nov20 decreasing from $5500 to $5100, -$400
Tier 2 / Dec20 decreasing from $5000 to $4600, -$400
Tier 3 / Jan20 decreasing from $4600 to $4300, -$300
Tiers 4 thru 124 also lowered by between $25 and $300

https://www.cmegroup.com/notices/clearing/2020/10/Chadv20-386.html

A quick article

https://energyanalyst.co.uk/trading-on-mean-reversion-in-energy-futures-markets/


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