Crude Oil WTI Futures COT Report: Week Ending July 31, 2026

Executive summary

This week's report reveals a significant sentiment shift among speculators, even as prices declined. Managed Money engaged in a substantial short-covering rally, slashing their net short position to its lowest level in over a month. This reduction in bearish bets occurred during a reporting week where front-month futures saw a notable price drop. Conversely, Commercials (Producers/Merchants) interpreted the price weakness as a buying opportunity, increasing their already substantial net long position. The increase in overall open interest alongside these positioning shifts suggests new capital entered the market, highlighting a dynamic environment where speculative bears are retreating while physical market participants increase their long exposure.

Positioning

• Managed Money (Funds): Flipped to a much less bearish stance, holding a net short position of -9,959 contracts. This is a dramatic reduction from their -17,208 net short position last week and marks the smallest net short held by this group since early June. The current position consists of 11,360 long contracts versus 21,319 short contracts.
• Producers/Merchants (Commercials): Remained solidly net long and increased their bullish exposure. They now hold a net long position of +64,024 contracts (404,261 longs vs. 340,237 shorts). This is up from +58,888 contracts last week and signals strong hedging of future production or locking in of input costs.
• Swap Dealers: Maintained a large structural net short position of -72,521 contracts. While still heavily short, this is a slight reduction from their -74,744 net short position in the prior week.

Flows and week-over-week changes

The most significant flow this week was the aggressive short-covering from institutional speculators. - Managed Money: Their net position increased by +7,249 contracts. This was overwhelmingly driven by a reduction in short positions (-5,015 contracts), with a smaller addition of new longs (+2,234 contracts). - Producers/Merchants: Increased their net long position by +5,136 contracts. This was also primarily achieved by reducing short hedges (-4,063 contracts), alongside a small addition to longs (+1,073 contracts). - Other Reportables: This category provided the primary selling pressure, acting as a counterparty to the buying. They decreased their net long position by a substantial -15,790 contracts, accomplished by liquidating longs (-5,950 contracts) and aggressively adding new shorts (+9,840 contracts).

Commercials vs speculators

The classic divergence between commercials and speculators sharpened this week. - Commercials are now net long +64,024 contracts. Their willingness to increase this long position into a price decline underscores a belief that current or lower prices are attractive for future physical supply needs. This group represents the core supply-and-demand players, and their positioning is a fundamentally supportive signal. - Managed Money, as the primary speculative force, remains net short at -9,959 contracts. However, the rapid and large-scale exit from short positions suggests that bearish conviction is waning significantly. While they have not yet flipped to a net long position, the trend has shifted decisively away from the peak bearishness seen in recent weeks.

Open interest and participation

• Open Interest: Total market participation grew, with open interest rising by 10,778 contracts to a total of 781,193. An increase in open interest during a period of price decline and major position changes indicates fresh activity and conviction, rather than passive position closure.
• Trader Concentration: The market remains unconcentrated. The four largest traders by net position hold 30.1% of the long side and 21.5% of the short side. These figures are in line with recent historical averages and do not suggest undue influence by a small number of players.

Price context

The positioning changes in this report occurred during the reporting week from the market close on Tuesday, July 21, to Tuesday, July 28. - During this period, the front-month contract experienced a sharp decline, falling from a close of $84.54 to $79.13. - The fact that Managed Money executed a major short-covering operation into this price drop is highly significant. It suggests bearish exhaustion, where funds used the downward momentum to take profits on existing shorts. - The market recovered significantly after the close of the COT reporting period, rallying from the low of $79.13 on Tuesday to close the week at $84.59 on Friday, July 31. This late-week price strength aligns with the reduction in speculative selling pressure revealed in this report.

Risks and watchpoints

• Bearish Exhaustion: The key watchpoint is whether the Managed Money short-covering continues. Their net position, while much improved, is still short. A flip to net long would be a strong technical signal that a more durable price bottom may be in place.
• Commercial Conviction: The commercial net long position is a strong supportive factor. Watch for any signs of them reducing this long exposure on price rallies, which would indicate they believe the market is reaching fair value.
• 'Other Reportables' Selling: The selling pressure from the Other Reportables category was immense this week. It is crucial to monitor if this flow subsides. Continued heavy selling from this group could cap any rally attempts, even if Managed Money turns more constructive.
• Price Action vs. Positioning: The divergence between falling prices and reduced speculative short-selling is a potential bullish setup. However, the market needs to see follow-through buying and a decisive flip to a net long speculative position to confirm a change in the primary trend.

Disclaimer: This analysis is for informational purposes only and does not constitute investment advice.