The Commodity Futures Trading Commission‘s long-awaited (well, for some people) new format report on trading positions is out this afternoon, providing a more detailed look at what kind of traders are involved in the markets for oil, natural gas and other commodities.
The new report comes in reaction to concerns that speculators — traders who don’t actually produce or use a particular commodity but are just betting on the direction of the prices — are improperly influencing market prices.
The weekly Commitments of Traders report for the first time breaks out commodity traders from just two types (commercial and non-commerical) into four types (producer/merchant/processor/user, swap dealers, managed money and other reportables). Past COT reports won’t be converted to fit this format, so there won’t be a historic comparison.
What’s it all mean? Good question. Some argue the past reports weren’t of much value. We’ll let you know once there’s been some analysis of the new report later today and this weekend.
In theory, the new report shows that “managed money” (such as hedge funds) provided a base for higher commodity prices by being net long on some markets where commercial producers were short, notes Reuters:
For instance, managed money was net long on 62,004 contracts of NYMEX crude oil, versus a net short of 125,206 lots held by commercials.
“It’s the same data, just broken out differently,” said Tom Bentz, energy analyst at BNP Paribas Commodity Futures Inc. “For those concerned about speculators in the market, I notice the managed money positions are not that different from the commercials.”