(click on image to enlarge)
BOTTOM LINE: According to the latest commitment of traders report from the Commodity Futures & Trading Commission, crude oil speculative open long positions totaled 257,989 contracts. These speculative long positions, which are a gauge of investment fund demand(which is paper demand, not real physical demand) for the commodity, have soared 28.6% in just the last six weeks and 112.9% from November 2005. On the other hand, crude oil speculative short positions totaled 166,364 open contracts in the latest report, which is just 2.6% higher from levels seen in November 2005. I continue to believe investment fund speculation is the driving force behind the current oil bubble. Moreover, the oil bubble is one of the main driving forces behind the current "US negativity bubble," in my opinion. It is also noteworthy that since November 2005, global oil demand is up a total of only 2.0% to 86.3 million barrels per day, while global production is up 2.6% to 87.0 million barrels per day, according to the Energy Intelligence Group. The graph above depicts the spread between the oil speculative longs(top) and speculative shorts(bottom) since November 2005.
No comments:
Post a Comment