In the week ending 29 October, Brent and WTI futures inched up but then saw pressure as they gapped down on 28 Oct as the risk premia built into their flat prices saw a significant reduction due to the Israeli strikes on Iranian military sites being seen as non-excitatory. Both WTI and Brent gapped down on the open, and there was better support at these lower levels. The geopolitical landscape has changed to feel less risk-on, although the rhetoric from Iran has ramped up a bit this week. Still, it will not be represented in the COT data next week. Both WTI and Brent saw an increase in short positions for the second consecutive week, with their total open interest increasing by over 2.00% (82.9mb). Short interest from funds in Brent Futures by around 9.8mb (11.05%) and a 16.8mb (28.0%) drop in short interest in WTI. The long:short ratio fell from 2.47:1.00 to 2.07:1.00 w/w (7th percentile for all weeks since 2013). Prod/Merc players continued to have a risk-on week, with both longs and shorts increasing their positions by 64mb and 36mb respectively.
