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Editor's Note: Below is a brief excerpt from today's Early Look written by Head of Sales and Research Daryl Jones. Click here to learn more about the Early Look.

Oil Prices: Bullish or Bearish? - 10.04.17 EL Chart

Trend following is prevalent in crude. CFTC net futures and options positioning bottomed in June right in line with crude oil prices and has since moved +127K longer on the margin over the last 3 months to net long +505K contracts. The all-time high in contract positioning came back in February at Reflation’s Peak (net long +586K)

So admittedly, it’s not totally a contrarian call to be sniffing around oil on the long side, but if oil does confirms a bullish to bearish transition, rest assured there is going to be a lot of capital chasing it. At down roughly -14% on the year, there are only two major asset classes performing worse . . . natural gas at down -32% and coffee at down -17%.  (Incidentally, in aggregate oil equities have performed worse than the commodity!)

Oil Prices: Bullish or Bearish? - early look