CTAs Extend Hold on Oil

According to recent research from Goldman Sachs, trend following CTA’s have been driving recent market declines in oil – repeating a trend that materialised across Q1 of last year. 1 However, unlike 2017, this year GS argues long speculative positioning has been driven by a solid fundamental backdrop – in no small part benefiting from carry-driven returns resulting from more pronounced backwardation in the market. Fundamentals – Irrelevant in Allocation? With the increasing role machine-based traders and investment managers play across markets we must wonder if this CTA led activity renders fundamental signals irrelevant in energy-based investment allocations? Trend following…