Oil on Monday logged its eighth straight day of gains, its longest such streak in five years, but one commodities trader sees a chance to sell crude in the near term.
“I am long-term bearish oil, but I’m staying out of the way until $47 to $48 [per barrel]. At that point, we could see a good sell opportunity,” Bill Baruch, senior market strategist at iiTrader, said Monday on CNBC’s “Trading Nation.”
U.S. West Texas Intermediate (WTI) crude, trading at $46.84 per barrel on Monday, has fallen nearly 13 percent year to date as a global supply glut and a lack of production cuts have driven down prices. Yet after five straight weeks of losses, which were met by an increase in short positions, oil prices rose 7 percent last week.
The Commitments of Traders data, provided by the Commodity Futures Trading Commission, showed short positions nearly doubled last month, thereby making net long positions in oil futures the smallest since August 2016, Baruch pointed out. Market positioning is often used as a contrarian indicator, meaning that increased bets against oil make other traders want to get long.
The rise in oil came as the total number of producing rigs fell last week for the first time since January, according to Baker Hughes data. Yet U.S. production climbed, which could further tamp down oil prices.
In CNBC’s latest oil survey, just over half of participants said the Organization of the Petroleum Exporting Countries has lost control of the oil market, and crude will likely set a bottom in the low $40 per barrel range.
At the same time, 60 percent of participants said OPEC will likely continue its efforts to talk up oil prices.