We've seen this pattern a few times recently: Positioning data released late on Friday shows extremely negative positioning in oil and on Monday there is a squeeze higher.
Unfortunately, the gains haven't lasted, at least not recently. There are already signs of that with WTI rising as high as $70.70 but now pulling back to $69.79.
Still, WTI is up $1.18 on the day and the net spec position in US crude futures and options contracts has reached an all-time low. The sellers are evidently betting on a slowdown in the global economy and soft Chinese growth in particular as a catalyst.
Rory Johnson at Commodity Context today highlights past troughs in sentiment since 2019 and finds that over the following 50 days, the average gain is $8/barrel.
Admittedly, that's not many data points and includes covid but it's something to consider.
