Oil traders that rely on trend-following algorithms have rapidly turned bearish over the past week as a plunge in equities reverberated across markets, and the bulk of their selling may already be completed, according to firms that track those investors.
As gloomy data on the US and Chinese economies caused a global market rout and raised concerns about oil demand, commodity-trading advisers turned more bearish on US crude and flipped to a net bearish stance on Brent this week, according to data from Bridgeton Research Group. The CTAs are close to the peak of their short positioning, says EA Quant Analytics, which tracks similar data.