• 2 hours PDVSA Booted From Caribbean Terminal Over Unpaid Bills
  • 4 hours Russia Warns Ukraine Against Recovering Oil Off The Coast Of Crimea
  • 6 hours Syrian Rebels Relinquish Control Of Major Gas Field
  • 7 hours Schlumberger Warns Of Moderating Investment In North America
  • 8 hours Oil Prices Set For Weekly Loss As Profit Taking Trumps Mideast Tensions
  • 9 hours Energy Regulators Look To Guard Grid From Cyberattacks
  • 10 hours Mexico Says OPEC Has Not Approached It For Deal Extension
  • 12 hours New Video Game Targets Oil Infrastructure
  • 13 hours Shell Restarts Bonny Light Exports
  • 15 hours Russia’s Rosneft To Take Majority In Kurdish Oil Pipeline
  • 21 hours Iraq Struggles To Replace Damaged Kirkuk Equipment As Output Falls
  • 1 day British Utility Companies Brace For Major Reforms
  • 1 day Montenegro A ‘Sweet Spot’ Of Untapped Oil, Gas In The Adriatic
  • 1 day Rosneft CEO: Rising U.S. Shale A Downside Risk To Oil Prices
  • 1 day Brazil Could Invite More Bids For Unsold Pre-Salt Oil Blocks
  • 1 day OPEC/Non-OPEC Seek Consensus On Deal Before Nov Summit
  • 1 day London Stock Exchange Boss Defends Push To Win Aramco IPO
  • 1 day Rosneft Signs $400M Deal With Kurdistan
  • 2 days Kinder Morgan Warns About Trans Mountain Delays
  • 2 days India, China, U.S., Complain Of Venezuelan Crude Oil Quality Issues
  • 2 days Kurdish Kirkuk-Ceyhan Crude Oil Flows Plunge To 225,000 Bpd
  • 2 days Russia, Saudis Team Up To Boost Fracking Tech
  • 2 days Conflicting News Spurs Doubt On Aramco IPO
  • 3 days Exxon Starts Production At New Refinery In Texas
  • 3 days Iraq Asks BP To Redevelop Kirkuk Oil Fields
  • 3 days Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 3 days Oil Gains Spur Growth In Canada’s Oil Cities
  • 3 days China To Take 5% Of Rosneft’s Output In New Deal
  • 3 days UAE Oil Giant Seeks Partnership For Possible IPO
  • 3 days Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 3 days VW Fails To Secure Critical Commodity For EVs
  • 4 days Enbridge Pipeline Expansion Finally Approved
  • 4 days Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 4 days OPEC Oil Deal Compliance Falls To 86%
  • 4 days U.S. Oil Production To Increase in November As Rig Count Falls
  • 4 days Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 4 days Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 4 days EU Urges U.S. Congress To Protect Iran Nuclear Deal
  • 5 days Oil Rig Explosion In Louisiana Leaves 7 Injured, 1 Still Missing
  • 5 days Aramco Says No Plans To Shelve IPO
Alt Text

Aggressive OPEC Pushes Oil Prices Up

Oil prices are once again…

Alt Text

The Next Big Digital Disruption In Energy

Blockchain technology is transforming the…

Alt Text

India’s Urban Explosion Boosts Oil Demand

As India sees incredible growth…

Oil & Gas 360

Oil & Gas 360

From our headquarters in Denver, Colorado, Oil & Gas 360® writes in-depth daily coverage of the North American and global oil and gas industry for…

More Info

Oil Futures: Who Is Trading What?

Oil

A presidential commission tracks the crude oil positions that are reported each week: this week producers and processors are short, while managed money is long oil

In its Weekly Commitment of Traders Report released every Friday, the United States Commodity Futures Trading Commission (CFTC) breaks down the number of outstanding short and long NYMEX futures and options contracts for light, sweet crude oil on the basis of four categories: PMPU, Swap Dealers, Managed Money, Other.

As of 10/7/2016, producers, merchants, processors, and users (PMPU) as well as swap dealers are net short, while managed money and what the commission calls ‘other reportables’ are net long.

(Click to enlarge)

Chart by EnerCom

CFTC’s definitions

A “producer/merchant/processor/user” (PMPU) is an entity that predominantly engages in the production, processing, packing or handling of a physical commodity and uses the futures markets to manage or hedge risks associated with those activities.

A “swap dealer” is an entity that deals primarily in swaps for a commodity and uses the futures markets to manage or hedge the risk associated with those swaps transactions. The swap dealer’s counterparties may be speculative traders, like hedge funds, or traditional commercial clients that are managing risk arising from their dealings in the physical commodity.

A “money manager,” for the purpose of the CFTC’s report, is a registered commodity trading advisor (CTA), a registered commodity pool operator (CPO), or an unregistered fund identified by CFTC.7. These traders are engaged in managing and conducting organized futures trading on behalf of clients. Related: The Truth About Permian Shale Break-Even Prices

Every other reportable trader that is not placed into one of the other three categories is placed into the “other reportables” category.

What does it mean?

The EIA offers background on who buys various contracts in the commodities trading markets.

“Oil producers and airlines have a significant commercial exposure to changes in the price of oil and petroleum-based fuels, and may seek to hedge their risk by buying and selling energy derivatives,” the EIA says in a note discussing the effects of trading and financial markets on crude oil prices. “For example, an airline may want to buy futures or options in order to avoid the possibility that its future fuel costs will rise above a certain level, while an oil producer may want to sell futures in order to lock in a price for its future output.”

(Click to enlarge)

Source: EIA

“Banks, hedge funds, commodity trading advisors, and other money managers—who often do not have interests in trading physical oil—are also active in the market for energy derivatives to try to profit from changes in prices. In recent years, investors have also shown interest in adding energy and other commodities as alternatives to equity and bond investments to diversify their portfolios or to hedge inflation risks.

(Click to enlarge)

Source: EIA

“Open interest on exchange-traded crude oil futures contracts increased substantially over the past decade, as measured by the New York Mercantile Exchange (NYMEX), the main commodities exchange for energy products in the United States. Both commercial participants (those that have a direct interest in physical oil production, consumption, or trade) and non-commercial investors (money managers and funds that are interested in trading contracts for investment and diversification purposes) have shown increased trading activity,” the agency reports.

By Oil & Gas 360

More Top Reads From Oilprice.com:




Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News