Crude Oil WTI (ICE) COT Brief: Week Ending May 8, 2026

Executive summary

For the week ending Tuesday, May 5th, positioning in WTI crude oil futures shows a deeply entrenched divergence between commercial and speculative players. Producers & Merchants hold a historically large net long position, indicating strong physical demand or hedging of input costs. Conversely, Managed Money holds a significant net short position, though they modestly reduced this bearish bet during the reporting period. The increase in Swap Dealer shorts suggests they are absorbing hedging flow from producers. Open interest rose to near-yearly highs alongside rallying prices, signaling fresh engagement in the market. The current setup is a classic standoff, with fundamentally-driven commercial buying pitted against bearish speculative sentiment.

Positioning (net, extremes vs recent weeks)

• Managed Money: Net short -37,321 contracts. This is a slightly less bearish stance than the prior week's -37,833 contracts. While still significantly short, it remains off the most bearish extreme of -45,234 seen in mid-April. This group has been persistently net short since at least late 2025.
• Producer/Merchant (Commercials): Net long +126,030 contracts. This is a very strong bullish position, although it has eased from the peak of +151,334 contracts in early April. The current level is substantially higher than the near-neutral positioning seen in February, highlighting a major shift in commercial sentiment over the past two months.
• Swap Dealers: Net short -92,716 contracts. This is a substantial short position, trending back towards the recent extremes of over -100,000 contracts seen in early April. Swap dealers typically take the other side of commercial hedges, and their large short position reflects the strong net long held by Producers.

Flows and week-over-week changes

• Open interest increased by a notable 10,962 contracts for the week.
• Managed Money was a net buyer of 512 contracts. This was a result of modest long liquidation (-1,259 contracts) being more than offset by significant short covering (-1,771 contracts). Covering shorts during a price rally is noteworthy.
• Producers/Merchants were net sellers of 1,719 contracts. They trimmed long positions slightly (-539 contracts) while adding new shorts (+1,180 contracts), likely using higher prices to add hedges.
• Swap Dealers were the largest sellers, increasing their net short position by 5,178 contracts. This was driven almost entirely by adding 5,051 new short positions, absorbing producer and other selling flow.

Commercials vs speculators

The market is defined by a stark positioning divergence: * Commercials (Producers/Merchants) are positioned aggressively long, with a net length of +126,030 contracts. This signals that physical market participants are actively buying futures to hedge against rising input costs or secure supply, a fundamentally bullish indicator. * Speculators (Managed Money) are positioned decidedly bearish, with a net short of -37,321 contracts. This setup creates a tense dynamic. Commercials appear to be steady buyers on any price weakness, while speculators have been adding to shorts on strength. The resolution of this divergence will likely drive the market's next major directional move.

Open interest and participation

• Total open interest rose to 866,504 contracts, just shy of the year-to-date high of 872,032 contracts recorded in mid-April. A rise in open interest during a week of rallying prices is technically bullish, as it suggests new money is entering to support the uptrend.
• Market concentration is stable. The four largest traders by net position hold 28.3% of the long side and 24.7% of the short side. These levels are consistent with recent weeks and do not indicate a major shift in positioning among the largest participants.

Price context

This report reflects positions as of the close of business on Tuesday, May 5th. * During the reporting week (from the close of Apr 28 to May 5), the front-month WTI contract rallied from $99.62 to $102.68. * The fact that Managed Money covered shorts during this price rally is significant, suggesting a lack of conviction or profit-taking on existing bearish bets. * Commercials used the price strength to add hedges, a typical behavior for this category. * It is crucial to note that prices saw a sharp decline after the May 5th cutoff, falling from $102.68 to $95.49 by May 8th. These shifts in price and the resulting positioning changes will only be captured in the next report.

Risks and watchpoints

• Short Squeeze Potential: The large net short held by Managed Money remains a key vulnerability. Should prices reverse higher again, a cascade of short-covering could fuel a sharp rally. The short-covering seen this week, even as prices rose, could be an early warning.
• Commercial Selling: A sustained and significant reduction in the Producer/Merchant net long position would be a major bearish watchpoint. It would imply that the physical bid is weakening or that producers believe prices have peaked.
• Divergence Resolution: The opposing, extreme positions of commercials and speculators cannot persist indefinitely. A catalyst that forces one side to capitulate will likely trigger a period of heightened volatility and a strong directional move.