More on Crude Futures Positions

I decided to post this graph of absolute futures positions for the physical players--Producers, Merchants and Processors--and swap dealers that primarily provide hedging to the physical players that choose not to do that in the open futures market.  What jumped out at me was just how correlated the short position of the producers and swap dealers was to price.  Also it is quite noticeable when the swap dealers hold large long positions price rises.

The short term bearish issue is the large short position held by the physical players.  You can see the build in short positions whenever price nears $50.  One must also take into account that the plot uses Tuesday's price to match up with CFTC reporting requirements, while the peak and trough prices for the week aren't shown.

Another noticeable issue is the physical players boost their long positions significantly whenever there were opportunities in the low $40s.  This plot shows that most clearly for the late August/early September time period, but if you look at day to day futures prices you will see many other low $40s opportunities were available as well.  Indeed a clear support level can be drawn in the low $40s on a daily chart, the futures data simply supports what is seen in the price action.