Will Crude Oil Recover After Seasonal Weakness And Short Squeeze?

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Crude oil prices are facing significant pressure this quarter, driven by China’s economic slowdown and signs of ample supply. WTI crude oil has experienced a notable seasonal downtrend during the period from September 17 to November 30, showing an annualized return of -27.48% over the past 33 years. With only a 39.39% win rate, this period has historically seen persistent selling pressure on crude oil.However, the current backdrop is complex. Despite the seasonal weakness, crude oil is seeing support from extreme short positioning among trend-following commodity trading advisers, who are close to their maximum short positions. This setup suggests that further selling pressure may be limited, as these shorts could unwind, potentially creating a short squeeze. Additionally, continued supply constraints in Libya and the US Gulf of Mexico, coupled with potential inventory drawdowns at Cushing, Oklahoma, this week, are lending support to prices.Video Length: 00:02:19More By This Author:The Triple Witching Effect: Will Markets React This Friday?Will The US CPI Print Lift The S&P500 Amid Rate Cut Speculation?The Weakest Month Has Begun!