Disliked{quote} I have a humble question, could you elaborate more on what's the difference between producers and money managers? Is it the case that producers represent hedge funds where their positions are mostly to hedge the oil prices? On the other hand, money managers represent big banks where they speculate on oil prices?Ignored
its very simple sir.
Producers/users represent big company dealing with commodities. They are institutional traders, hedging their risk of higher/lower prices. Risk of lower prices for producers so they hedge short contracts, risk of higher prices for consumers (buyers of commodites like starbucks buying coffee) so they hedge long contracts.
Money managers are speculators, they are trend followers. They dont have any interests in physical commodites. They just buy and sell like you or i do.
They are hedge funds, banks, pension funds, mutual funds, etc....
Usually they accumulate prices as it goes towards a direction, hence they are extremely longs on top, extremely short on bottom.
Hope it helps.
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