The December crude oil contract ended Tuesday 10-27 around $43.39/bbl.  This weeks CFTC Commitment of Traders Report (COT) for 10-27 indicates that swap dealers and the largest traders continue to get more bullish, but managed money has gotten significantly less bullish as have physical traders and the non-reportable group.  I believe this reflects physical traders and producers selling above $47, the large amount of oil in storage--especially the recent surge in tanker storage-and most importantly US production that has leveled off.

Still total contract numbers show long positions increasing for every group even as short positions increase in some groups, negating any growth in long positions in those groups.

As you can see my indicator for swap dealers is now much more bullish than it was for the March and August surges.  Indeed we saw a Wednesday surge in price when the EIA report indicated that crude+refined inventory fell 3.5MM bbl.  This was mostly due to high demand and a drop in imports.  The biggest drop in imports was from Mexico.  Imports from Canada and Saudi Arabia were very strong.  I believe imports from both Canada and Saudi Arabia, especially Saudi Arabia, can move significantly higher.

All indicators show a strong cap remaining on crude oil prices, however pressure continues to build for a strong upside move.  My belief is last weeks bullish EIA inventory data is a one off event for now, this week should show a build.  Market reaction after the Genscape inventory reports this week has been generally bearish.

I am primarily short crude.  Short CLZ5, own DWTI and have sold both puts and calls on USO.  I'm medium and long term bullish on crude, but short term bearish.

Looking to rebuy UWTI in the $8.25-$9 range, buy CLZ5 in the $42.50-$43 range and sell puts on USO when it hits $13.75-$14.