RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Energies

Fresh Highs and Near Record Longs in Crude Oil

Posted 04/12/2018 1:04PM CT | Michael O'Donnell

As of nearly noon Thursday, the May crude oil contract is trading at $66.75 as the market made a high of $67.45 yesterday following the EIA inventory report and geopolitical concerns in the Middle East, namely Syria and Riyadh.

While continued saber rattling and brinkmanship will aid a bid in this market as it trades higher than it has since 2014 and above recent highs of $66.66, market participants may also note the near record net longs in Commitments of Traders data and the potential for those longs to be liquidated rather rapidly if things cool down internationally.

There is the potential for new highs to continue given trading at prices not seen in years and near record longs. There is also the possibility the near record longs begin to become a crowded trade, liquidating more quickly as falling markets have the potential to fall more quickly, taking the stairs up and the escalator down.

OPEC production quotas and US Production set to eclipse Russia in 2019 with output at its greatest level since the 1970s should also be considered.

 For a market such as this, trading at a level not seen in several years, our desk is utilizing a number of strategies including futures, options, combinations of both and spreads of each.  Contact us to discuss the best strategy for your account.

Crude Oil Weekly Chart with COT

Crude Oil Weekly Chart

Chart Source: finviz.com

 

Michael O'Donnell

Mike started his career in the markets on the floor of the Chicago Board of Trade as a trade checker for a local market maker in the Dow Futures pit. This led to interning with an independent introducing broker and going on to work with a number of market participants including: speculating clients, hedge clients, introducing brokers, futures commission merchants, commodity trading advisors, proprietary traders, trading educators, system creators, and a number of international financial market participants.