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Speculative positioning in crude oil declined across both gross speculative length and short positions as of last Tuesday, with some participants taking risk off the table ahead of the U.S. midterm elections. Rory Johnston reported that despite this pullback, speculative positions remained at the higher end of recent experience, creating a skew in price move risk.
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Earlier, Rory Johnston observed a bearish divergence between prompt Brent crude futures prices and the related timespread. He also noted that crude oil rebounded after an initial decline, with continued expectations for market volatility. These previous developments set the backdrop for the current shifts in speculative positioning.