In the week ending 26 Aug, M1 Brent futures strengthened from below $66/bbl to $67.30/bbl, noting resistance at a high of $69/bbl on 25 Aug. Prices have since traded sideways, with the M1 (now, Nov’25) sitting at $67.75/bbl at the time of writing on 1 Sep.
The M1 WTI futures contract moved similarly, rising from $62.75/bbl on 19 Aug to above $65/bbl on 25 Aug, where it met resistance and sold off to $63.30/bbl on 26 Aug. Prices regained strength here and stand at $64.30/bbl at the time of writing on 1 Sep.
Notably, exchange-traded open interest (OI) in Brent futures climbed by 37mb w/w in the week ending 26 Aug to 2,902mb, while OI in WTI futures fell by over 10mb w/w to 1,912mb. Nevertheless, the speculative long-to-short ratio in WTI futures stands at 1.20, well under the 5th percentile for all weeks since the data started being recorded in 2013. This overcrowding of shorts makes these players exceptionally vulnerable to a bullish catalyst in the market.
