• Both Brent Oil and Oil.WTI have moved higher today
  • Brent Oil close to $64 and not far from its highest level since 2015
  • Latest COT data shows extreme long positioning remains

The oil price has been remarkably steady in recent trade with both Brent and WTI trading in narrow ranges. Even last month’s OPEC meeting failed to spark a substantial move and it now appears that both markets are continuing to consolidate after the run higher seen from the summer lows. 

link do file download link

 Brent has remained in a relatively narrow range from 61.12-64.65 for the last 6 weeks. A break of this range could lead to the next big move. Source: xStation

Whilst there has been this period of consolidation of late the market remains in an uptrend longer term and a break above the 64.65 level could be seen to open the door to an extension higher.

link do file download link

 After finding a low around the mid 40s back in June the market has enjoyed a strong move higher with a gain of around 45%. Source: xStation

Despite the prevailing uptrend, there should be a note of caution for oil bulls with the current level of speculative positioning approaching extremes. According to the latest COT report there has been little change in the net positioning in both Brent and WTI. With the most widely traded contracts (CME for WTI and ICE for Brent) sitting above 95% long relative to their one year max. 

link do file download link

 Both Brent and WTI speculative long positioning remain near historical extremes which can be seen as a contrarian indicator for price falls. Source: CFTD, Bloomberg and Saxo Bank.