This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Oil Prices to Fall This Summer, Says the Smart Money: StockTwits

NEW YORK (TheStreet) -- Summer is coming and investors are preparing, as usual, by betting that oil prices will rise. But this year, they might do better banking on less pain at the pump.

John Kosar, a StockTwits member and Director of Research at Asbury Research, sees concerning signs in the behavior of commercial hedgers in oil futures contracts.

Smart money commercial hedgers are holding a record net short (bearish) position of 445,492 crude oil futures contracts as of May 27th.

? John Kosar, CMT (@AsburyResearch) Jun. 1 at 11:00 AM

Kosar, who hails from the trading pits of the Chicago Mercantile Exchange, maintains that commercial hedgers are the ones to watch when it comes to predicting oil prices. Unlike large speculators, which tend to be firms that often buy futures based on momentum, commercial hedgers are in the oil business and trying to protect their livelihood.

"These are the inside guys," explained Kosar in a phone interview. "These guys know the business."

Since March, commercial hedgers have hovered near record short levels. The way Kosar reads the data, hedgers believe the current oil price around $103 per barrel is frothy. And they're trying to protect themselves from when prices inevitably come down.

Large speculators, on the other hand, see little chance of that happening. This group is the most net long that they have been in the history of the data, said Kosar.

New Research Excerpt: "Oil Prices: Smart Money Skeptical At $103 Per Barrell"

? John Kosar, CMT (@AsburyResearch) Jun. 4 at 01:39 PM

The general investment bullishness on oil is reflected in the sentiment of oil stocks. Investors are 61% bullish on United States Oil (USO) according to StockTwits analytics.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
USO $11.30 0.00%
AAPL $93.74 0.00%
FB $117.58 0.00%
GOOG $693.01 0.00%
TSLA $240.76 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs