OIES – Energy Quantamentals: To Follow the Crowd or To Fade the Extremes

The main theme of the document concerns the behavior of algorithmic traders and their impact on oil prices.

The study focuses on an investment strategy that either follows the trend or opposes it to determine whether oil prices will remain within a certain range or a new trend will begin. Key findings include an analysis of two opposing investment strategies: following the behavior of quantitative funds (momentum trading) and taking opposite positions when fund positions become too crowded (mean reversion trading). The study also examines how these strategies may influence future oil price trends.