A Number Of Streaks In Oil Trading And Production

New York (HedgeCo.Net) – The oil market has been on a wild ride over the past year. After prices for West Texas Intermediate Crude peaked at $107.68 last June, the price per barrel fell to as low as $42.41 in March and has since bounced back above the $60 level, at least on a temporary basis.

With all of the big price changes, several streaks have developed—some are production streaks and some are trading related streaks. Here are some that stood out:
• The number of active oil rigs in use in the United States has declined for 22 straight weeks.
• From September through January, the price of WTIC fell in 14 out of 17 weeks
• In the last seven weeks, the price of WTIC has risen in six of the seven weeks.
• Large Speculators (such as hedge funds) have increased their bullish position on the Commitment of Traders report in five out of the last six weeks, causing the net long position to jump to over 325,000 contracts from just over 200,000 contracts in late March.

With the recent winning streak for oil, the weekly chart does show that the commodity is in overbought territory according to several overbought/oversold indicators. Wednesday’s oil inventory reports will be more closely watched than usual as investors of all varieties seek information on supplies.

Rick Pendergraft
Research Analyst

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