Crude Oil WTI COT Brief for the week ending August 28, 2026

Executive summary

A significant reduction in market participation characterized this week's positioning in WTI Crude Oil futures. Total open interest plummeted by over 37,000 contracts, driven primarily by a substantial liquidation of long positions from the Producer/Merchant category. While Commercials remain heavily net-long, this reduction signals a potential decrease in hedging activity or bullish conviction at current price levels. Concurrently, Managed Money (speculators) remain modestly net-short, with only minor adjustments this week that suggest a lack of strong directional bias. The price action during the reporting period was notably weak, aligning with the observed commercial selling pressure.

Positioning

• Managed Money: Speculators hold a net short position of -10,359 contracts. This is a slight reduction in their net bearish stance from the prior week's -10,696 contracts but marks the continuation of a net short posture held for several consecutive weeks.
• Producer/Merchant: Commercials maintain a significant net long position of +88,782 contracts. However, this represents a notable decrease from their +95,468 net long position last week, reflecting significant selling.
• Swap Dealers: This group holds a large net short position of -76,442 contracts, which is typical as they act as counterparties. This is a narrower short position compared to -80,781 contracts in the prior report.

Flows and week-over-week changes

The reporting week was defined by a major exit from the market, with open interest falling by 37,177 contracts. - Producer/Merchant: This cohort was the primary driver of the week's activity. They liquidated a massive 27,989 long contracts while also cutting 21,303 short contracts. The larger reduction in longs resulted in net selling of 6,686 contracts. - Managed Money: Speculative flows were mixed and relatively muted. They added 1,408 longs and 1,071 shorts, resulting in a marginal net buying of 337 contracts. More significantly, they reduced their spreading positions by 3,499 contracts, pointing to position squaring rather than new directional bets. - Swap Dealers: This group engaged in notable short-covering, reducing their short exposure by 3,535 contracts while adding a modest 804 longs. This led to a net buying of 4,339 contracts.

Commercials vs speculators

The classic dynamic of bullish Commercials versus bearish Speculators is present, but the weekly flows tell a more nuanced story. - Commercials (Producers): As the natural longs in the market, their +88,782 contract net long position underscores a broad, ongoing hedging need. However, their aggressive liquidation of longs this week suggests that at recent price levels, the impetus to hedge future production has waned, or they are taking profits on existing hedges. - Speculators (Managed Money): The speculative community remains tentatively bearish with a small net short of -10,359 contracts. Their activity was minimal, indicating they are not pressing their bearish bets despite the price weakness seen during the reporting window. Their positioning is far from historical extremes.

Open interest and participation

• Open Interest: Total open interest saw a sharp decline of 37,177 contracts, falling to 778,174. This is a significant one-week drop and indicates a substantial reduction in overall market risk and participation.
• Trader Counts: The number of total reporting traders fell from 117 to 112, consistent with the decline in open interest.
• Concentration: The market remains fairly concentrated. The largest four traders by net position hold 28.1% of the long side and 20.9% of the short side. These figures are broadly unchanged from the prior week, suggesting the reduction in OI was widespread rather than concentrated in a few large hands.

Price context

The price series for the CL front-month contract shows significant volatility. The prior week (ending Aug 21) closed at $86.64. During the COT reporting window (ending Aug 25), prices fell sharply, with the close on the 25th at $81.10. The market then saw a partial rebound, closing the week on Aug 28th at $83.24. The substantial liquidation of long positions by Commercials aligns perfectly with the sharp price drop observed leading into the Tuesday as-of date. The short-covering from Swap Dealers may have helped provide a floor for prices later in the week.

Risks and watchpoints

• Commercial Selling: The most significant watchpoint is the aggressive long liquidation from Producers/Merchants. If this cohort continues to reduce its net long exposure, it could remove a critical source of support for the oil market.
• Speculative Apathy: Managed Money's lack of conviction is notable. A decisive move to either cover their shorts and flip net-long, or to aggressively add new shorts, would likely dictate the market's next major directional move.
• Open Interest: A continued decline in open interest would signal further de-risking and could lead to choppy, lower-liquidity trading conditions. Conversely, a rebound in OI would indicate renewed conviction from market participants.