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Crude Oil Prices Plunge on Coronavirus Latest: Traders Badly Positioned

COT Report: Gold, Silver, Crude Oil, Copper Analysis & News

  • Trader Badly Positioned for Crude Oil Plunge
  • Gold Net Longs Ease
  • Copper Bulls at Risk

The Predictive Power of the CoT Report

Oil: According to the latest speculative positioning, net bullish bets on Brent crude rose to a fresh 15-month high. However, given the continued fears over the outbreak of the coronavirus, traders appear to be badly positioned after Brent crude prices saw its largest weekly drop since September 2018. While the impact of the virus on the oil market is difficult to assess, focus will be on China’s ability to contain the outbreak. As such, risks remain tilted to the downside as the number of cases continue to rise, prompting a liquidation in bullish bets as global demand for fuel eases.

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CORONAVIRUS MAP

Gold: Investors lightened their net longs in Gold with gross longs cut by 1%, while short positions increased by 6% as the safe-haven remained range bound. Keep in mind however, that this was prior to Friday’s breakout to $1580 on the back of safe-haven flows stemming from a pullback in risk appetite. Subsequently, with coronavirus concerns the temporary market driver, gold prices are likely to remain underpinned in the near-term.

Copper: Amid the ongoing concerns around Chinese demand, pro-cyclical commodities such as copper have been on the backfoot. Recent changes in positioning has seen investors reduce their outright longs and shorts in the industrial metal. Although, with equity markets coming under pressure, downside in copper prices looks set to persist.

Current Positions

Crude Oil Prices Plunge on Coronavirus Latest: Traders Badly Positioned

Source: CFTC, DailyFX (Covers up to January 21st, released January 24th)

Oil Price Chart and Positions

Oil Traders Badly Positioned for Deeper Oil Price DropPlease add a description for the image.

Gold Price Chart and Positions

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Silver Price Chart and Positions

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Copper Price Chart and Positions

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*Long & Short positions are adjusted for open interest

— Written by Justin McQueen, Market Analyst

Follow Justin on Twitter @JMcQueenFX