By Brad Zigler
Real-time Monetary Inflation (last 12 months): 3.8%
For most of this year, money managers have been middling buyers of crude oil futures. Overall, the disposition of the funds toward petroleum has been—how shall I put it?—cautiously bullish.
That was, at least, the case until this month. In October, the spark was set to the funds' tinder. Funds are now more bullish than they've been over the last three years. Yes, even more bullish than last year when crude prices raced above the $140 level.
At the high, er, water mark last summer, two thirds of funds' oil positions were long. Now, more than 82% are. Not as bullish as fund runners' positions in gold and silver, mind you—there they lean 99% and 97%, respectively, on the long side—but big nonetheless (click to enlarge).
Money Managers' Long Exposure To Crude Oil
Fund runners, too, hold the largest net interest in the crude oil market, even larger than producers and commercial users. The funds are now the only trading block holding a net long position: Commercials are short; swap dealers are short and noninstitutional traders are short.
That was pretty much the market makeup last spring, ahead of the market's peak. The question traders are asking themselves now is this: How long before the peak this time?