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According to the latest CFTC weekly report on commodities, speculators aggressively liquidated their longs and moderately covered some shorts in WTI crude ahead of last Friday’s OPEC meeting.

Key Quotes

“Investors widely anticipated that OPEC+ would boost production in response to crumbling Venezuelan production and Iranian supply risks. However, we suspect that specs will once again grow their exposure in response to the smaller-than-expected 600k bbls/d cartel response, while a 360k bpd disruption in Canada for the next month should also help lift WTI and lower inventory expectations.”

“Gold specs aggressively reduced net length last week, cutting longs and piling on new shorts. The central bank divergence between the hawkish Fed and dovish ECB saw the dollar rally and precious metals tank. Even the worsening of trade tensions between the US and China could not provide the yellow metal with a safe haven bid. The more hawkish environment should continue to keep gold under wraps near term, but with an already flat curve and boiling trade tensions, aggressive hikes through 2019 could very set the stage for a policy mistake that gives gold a boost.”

“Money managers aggressively increased their short bets and liquidated some upside bets as platinum prices broke through the psychologically important $900/oz level. Indeed, platinum suffered from its strong correlation to the yellow metal as a stronger dollar amid divergent central banks led specs to shun precious metals. And, considering its industrial luster in conjunction with boiling trade tensions, net length turned short and the most bearish on record.”