The Commodities Futures Trading Commission revised its estimate of how prevalent speculation was in affecting oil markets, concluding that data reveals that speculators account for 48 percent of the of the open interest in NYMEX crude oil futures and options as of July 15, up nearly 25 percent from previous estimates, according to a Reuters report.
“That's huge when you look at the numbers," Phil Flynn of Alaron Trading told Reuters. “It changes the whole way you look at the recent moves in this market."
The change comes from a reclassification of some trading position, a move CFTC announced last month, from commercial hedging positions to non-commercial speculative positions. Oil traders and analysts were surprised by the move since the agency, according to Reuters, reclassified only one unidentified oil trader at the same time as the data revision.
"There may have been multiple 'positions' which were reclassified ... but they all appear to have been held by just one trader, and this was a very special trader, with an enormous concentration of positions in crude oil amounting to perhaps 460 million barrels, and not much interest in anything else," noted John Kemp of RBS Sempra Commodities to Reuters.