renterclient-Do not spend to much time on irrelevant minutia of the oil futures market. What should be of concern to you is the fact that world oil production will most likely go into terminal decline within 5 years or less and that demand will forever outstrip supply.
In the next few years oil could go to $300 as it could to $80 due to short term elasticity and long term fundamentals. For learning more about this situation and everything you ever wanted to know about the futures market go here.
The oil price can be thought of as a composite signal, resulting from a speculative signal superimposed over a fundamental signal. If we can determine the magnitude and sign of the speculative signal at each time, we can ascertain whether speculation was the main driver of the latest price rise or not.
To that purpose, an essential source of data is the weekly Commitments of Traders (COT) report from the CFTC. For the report, each trader is classified either as “commercial”, if the trader uses futures contracts in that particular commodity for hedging (meaning they deal with the physical commodity in the spot market), or “non-commercial.” Traders holding less positions than a specified number of contracts (different for each commodity) are “nonreportable”. For “Nonreportable Positions,” the number of traders involved and the commercial/non-commercial classification of each trader are unknown.
