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Money Managers Cut Long And Short Positions In Oil

Posted by: : Paul EbelingPosted on: May 17, 2015 Money Managers Cut Long And Short Positions In Oil

Money Managers Cut Long And Short Positions In Oil


On the week ended 15 May, the number of rigs drilling for oil in the United States totaled 660, compared with 668 in the prior week and 1,531 a year ago. Including 228 other rigs mostly drilling for Nat Gas, there are a total of 888 working rigs in the USA, down 6 W-W and down 973 Y-Y. The rig count for Nat Gas rigs is down by 103 Y-Y.

The data come from the latest Baker Hughes Inc. (NYSE: BHI) North American Rotary Rig Count.

Last month the industry dropped 26 Oil rigs. The next week 31 rigs were idled, followed by 24 in the week ending 24 April. The number fell to 11 for the week ending 9 May.

With WTI Crude Oil trading in a range of around 50 to 6o bbl since April, the market for Crude may be reaching the point where supply and demand coming into balance.

Some exploration and production companies have said that they are prepared to restart drilling and completion work once prices stabilize at 60 to 70 bbl. Not seen likely soon. Because, unless demand increases, the cycle that began late last Summer will repeat, and perhaps dive deeper.

Last year the shale Oil producers had to stop drilling, completing and producing because the price fell below the break-even mark to lift.

Crude prices were + 0.8% last week to finish at around 59.88 bbl. Crude Oil stockpiles fell by 2.2-M bbl last week, the 2nd consecutive large decrease. Gasoline stockpiles also fell as refineries ran at about 91% of capacity, down nearly 400,000 BPD from the prior week.

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Managed Money aka hedge funds in the CFTC Commitments of Traders report decreased both Long and Short positions on Crude Oil.

The funds cut Long positions by nearly 15,000 contracts and Short positions by about 12,000. Both those totals are higher than a week ago, when managed money added about 1,500 Long contracts and reduced Short positions by about 7,500 contracts. The decreases reflect changes as of the 12 May settlement date. Managed money holds 325,773 Long positions, compared with 62,741 Short positions.

Among the producers Short positions outnumber longs, 402,482 to 235,078. The number of Short positions last week rose by 4,004, Longs added 1,448. Positions among swap dealers show 358,723 shorts Vs 204,021 longs. Swaps dealers increased their Long positions by a total of more than 7,200 contracts last week, Shorts exited 1,746 contracts.


As of Friday, the posted price for Williston Basin sweet Crude rose from 48.44 to 48.94, and Williston Basin sour Crude also rose, from 43.83 to 44.33 bbl. Eagle Ford Light Crude rose from 55.75 to 56.25, about the same price as WTI.

The price of Gasoline increased over the week. Saturday morning’s average price in the United States was 2.699 gal, up about 1.5% from 2.66 a week ago.

HeffX-LTN Analysis for USO: Overall Short Intermediate Long
Neutral (0.21) Neutral (0.23) Bullish (0.35) Neutral (0.04)
HeffX-LTN Analysis for UNG: Overall Short Intermediate Long
Neutral (0.22) Bullish (0.40) Bullish (0.29) Neutral (-0.0
HeffX-LTN Analysis for UGA: Overall Short Intermediate Long
Bullish (0.41) Bullish (0.30) Very Bullish (0.57) Bullish (0.35)

Have a terrific week.


Paul Ebeling


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Paul Ebeling

Pattern Recognition Analyst, equities, commodities, forex
Paul Ebeling is best known for his work as writer and publisher of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly-regarded, weekly financial market letter, where he enjoys an international audience among opinion makers, business leaders, and respected organizations. Something of a pioneer in online stock market and commodities discussion and analysis, Ebeling has been online since 1994. He has studied and worked in the global financial and stock markets since 1984.

Trade FX, Equities and Options with the World's Leading Platform , call our trade desk 631 482 0376, or contact us to get started.

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