Market update: last week’s pause pushed crude oil retail traders to add upside bets

Crude oil sentiment outlook: bearish

Crude oil prices took a breather last week, leaving West Texas Intermediate (WTI) little changed by Friday. This meant a pause after weeks of consistent gains.

Recent data from IG Client Sentiment (IGCS) shows that there has been a cautious increase in upside exposure in crude oil. IGCS tends to function as a contrarian indicator, with that in mind, could oil aim lower in the near term?

According to IGCS, only 36% of retail traders are net-long crude oil. Since most of them are biased to the downside, this continues to suggest that prices may rally down the road.

That said, upside exposure has increased by 7.73% and 1.81% from the last trading day and one week ago, respectively. With that in mind, recent changes in positioning hint that prices might soon reverse lower ahead.

IG Client Sentiment chart

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