Recently the EIA and other publications I love to read such as ClipperData have recently noticed that the short position held by producers of oil has reached a 9 year high. However, producers hedge and are not market timers.

The green and red lines correspond to where short positions peaked with the green lines oil bottoming or continuing higher and red where oil peaked. Seven times oil continued higher while producers were maximizing their shorts and five times oil peaked.

Data from St. Louis Fed FRED and EIA

This next chart shows oil prices versus the net difference between short and long positions for producers. This metric also does not have a predictive ability.

Data from St. Louis Fed FRED and CME

At least the oil companies are half the time correct in their hedging activities, the gold companies are very poor price predictors.

Data from Kitco and the National Post

Basically your guess on where prices are going are as good as the CEO’s of the companies producing the resources.