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Commodity Markets

OPEC Monthly Oil Market Report – September 2017

11

Investment flows into commodities

Open interest (OI)

increased in August for selected US commodity futures markets such as copper, crude

oil and livestock while it was relatively stable for natural gas, agriculture and precious metals. Meanwhile, in

monthly terms, speculative net length positions increased for precious metals, copper and crude oil, while

they declined for agriculture, natural gas, and livestock.

Table 2 - 2: CFTC data on non-commercial positions, ‘000 contracts

Agriculture’s OI

increased by 4.4% in August. Meanwhile, money managers’ aggregate net position turned

bearish again with a net short of 89 thousand lots, following a short lived push in July. The switch to a

combined net short position was mainly concentrated in net short positions in soft red winter wheat.

Henry Hub’s natural gas OI

decreased slightly by 1.1% m-o-m in August. Money managers decreased their

net length by 22.8% to 66 thousand contracts, though speculators have held a net long position for the last

12 months.

Graph 2 - 3: Money Managers activity in key

commodities, net length

Graph 2 - 4: Money Managers activity in key

commodities, as % of open interest

Copper’s OI

increased by 18% m-o-m in August. Money managers increased their net long positions by

58% to 118 thousand contracts in August. Speculator positions have increased 2.7 times since May, amid a

price rally of around 16% during the period.

Precious metals’ OI

was relatively stable in August, however Money managers turned bullish, as shown by

a jump in their net long positions by 5.3 times to 206 thousand contracts. This put the Money managers’ net

length as a share of open interest at 30%, their highest level since April.

Jul 17

Aug 17

Jul 17

%OI

Aug 17

%OI

Crude oil

2,149

2,246

183

9

247

11

Natural gas

1,339

1,324

86

6

66

5

Agriculture

4,955

5,034

32

1

-89

-2

Precious metals

677

675

39

6

206

31

Copper

277

329

74

27

117

36

Livestock

712

647

207

29

174

27

Total

10,109

10,255

620

77

721

107

Note: Data on this table is based on monthly average.

Source: US Commodity Futures Trading Commission.

Open interest

Net length

-400

-200

0

200

400

600

800

-400

-200

0

200

400

600

800

Aug 16

Sep 16

Oct 16

Nov 16

Dec 16

Jan 17

Feb 17

Mar 17

Apr 17

May 17

Jun 17

Jul 17

Aug 17

Agriculture

Gold

WTI

Livestocks

Copper

Natural gas

Note: Data on this graph is based on monthly average.

Source: US Commodity Futures Trading Commission.

'000 contracts

'000 contracts

-10

0

10

20

30

40

50

60

70

-10

0

10

20

30

40

50

60

70

Aug 16

Sep 16

Oct 16

Nov 16

Dec 16

Jan 17

Feb 17

Mar 17

Apr 17

May 17

Jun 17

Jul 17

Aug 17

%

%

Agriculture

Gold

WTI

Livestocks

Copper

Natural gas

Note: Data on this graph is based on monthly average.

Source: US Commodity Futures Trading Commission.