The Last Time Oil Speculators Were This ‘Long’, Crude Collapsed

Despite soaring rig counts, surging US shale production, and increasing doubts over OPEC/NOPEC cuts being sustained (albeit with Saudi jawboning)…
Oil speculators have decided to add to their long positions in the last week, pushing the net position in futures to a new record high – above the 2014 peak from which crude collapsed.
As Raoul Pal detailed previously, look at the term structure of crude oil. We’ve got a fairly steep contango for a few months but then we see backwardation in the belly of the curve. So apparently, we’re not going to need storage after June or July or so it’s going to be a non-issue those tanks are going to be empty. I’m not buying that story.

This post was published at Zero Hedge on Jan 22, 2017.