CFTC Data Tells us Banks are BEARISH OIL!

The latest CFTC data for oil shows that long positions have remained relatively stable, declining only slightly from 335K to 330K. Short positions, however, have continued to increase, moving from 245K to 255K. We have been observing a gradual but steady increase in short positioning over the past several weeks as price continues to trade toward elevated levels. The coloration of the CFTC cells indicates that institutional sentiment is leaning toward the short side. Although net positioning remains bullish, with long positions still exceeding short positions, we cannot ignore the growing bearish sentiment developing beneath the surface.

From a technical perspective, the daily timeframe initially came into play, producing a daily 🟩 demand zone that propelled price higher. As price advanced, the upper 4-hour 🟥 supply zone was removed, creating new demand. That demand was subsequently taken out, producing supply, before another 4-hour 🟩 demand zone ultimately became the foundation for the next move higher.

Price encountered some turbulence around the $100 level, where selling pressure appeared to overwhelm the buying force originating from the 4-hour demand zone. However, the 4-hour timeframe has since reclaimed control of price, with the current 🟩 demand zone around $100 continuing to hold.

This $100 demand zone is now particularly important. If it remains intact, price may continue to find support and push higher. However, should this demand zone be removed, it would open the door for a potential move lower. Given the gradual increase in short positioning and the bearish sentiment reflected in the CFTC cells, this is an area we will be monitoring very closely in the coming week.