Onyx’s in-house CTA positioning model determines the net positioning of CTAs in a range of futures benchmarks. The prior week’s uptrend in net positioning was short-lived, as it decreased by 100% w-o-w from -74k lots to -148k lots from 16 August to 23 August. The decline decelerated between 22 and 23 August, implying that short positions are becoming overcrowded and hence primed for a reversal. Looking at the individual products, positioning in the middle distillates are the most bearish, with ICE gasoil and NYH Heating Oil at -31.8k and -32.9k lots respectively. Meanwhile, WTI remains the least bearish at -26.6k lots, although it has rapidly converged with RBOB. With crude rallying into 26 August, it will be interesting to track CTA trends in the coming week. We anticipate that the unwinding of existing short positions will amplify crude’s upside in the short-term.
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