Heating Oil (NY Harbor ULSD) Futures - COT Brief for May 1, 2026

Executive summary

In the week ending May 1, 2026, positioning in Heating Oil futures showed signs of waning bullish momentum and a broader exit from the market. Managed Money speculators turned more cautious, adding significantly more shorts than longs, which reduced their net long position to its lowest level in the available data. This occurred despite a modest price rally during the reporting period. Concurrently, Commercials (Producers/Merchants) continued to reduce their net short hedge, reaching the least-hedged position in over four months. This broad unwind is reflected in a continued, sharp decline in total Open Interest, which has fallen dramatically from its peak earlier in the year, suggesting a significant reduction in overall market participation and conviction.

Positioning

• Managed Money Net Position: Speculative funds hold a net long position of +12,499 contracts (28,393 long vs. 15,894 short). This is a multi-month low, down from over +24,000 contracts in February and March, indicating a significant decrease in bullish conviction from this key group.
• Producer/Merchant Net Position: Commercials hold a large net short position of -67,104 contracts (55,884 long vs. 122,988 short). This is the smallest net short position recorded in the provided historical data, which dates back to December 2025. For context, their net short position was as high as -112,090 contracts in late January.
• Swap Dealers Net Position: Swap Dealers maintain a net long of +36,957 contracts (52,917 long vs. 15,960 short). Similar to other categories, this is the lowest net long position for this group in the dataset, continuing a trend of unwinding from a peak of over +70,000 contracts in late January.

Flows and week-over-week changes

The reporting week saw a net exit of capital, with Open Interest falling by 6,649 contracts. - Managed Money: This group displayed a distinctly bearish flow. While they added a modest 498 long contracts, they aggressively added 1,865 new short contracts, driving the reduction in their net long stance. - Producer/Merchant: Commercials continued to de-hedge, reducing both long positions (-1,452 contracts) and short positions (-617 contracts). The net effect was a slight increase in their net short position, but the overall theme is one of reducing gross exposure. - Swap Dealers: Liquidated positions on both sides, cutting longs by 2,429 contracts and shorts by 1,217 contracts, resulting in a smaller net long position. - Non-reportable Positions: Smaller, non-professional traders showed a contrasting bullish sentiment, adding 1,570 long contracts while cutting 2,264 short contracts.

Commercials vs speculators

The classic dynamic of speculators (Managed Money) being net long against net short Commercial hedgers remains, but the magnitude of these positions has changed dramatically. - Commercials: The Producer/Merchant net short position (-67,104 contracts) is exceptionally light compared to recent history. This reduction in hedging could signal that producers see less downside price risk, have sold physical product and are closing hedges, or are waiting for higher prices to re-initiate hedges. - Speculators: The Managed Money net long position (+12,499 contracts) has been more than halved from its recent peaks. The addition of new shorts this week suggests some funds are now actively betting on a price decline or are hedging long-biased commodity portfolios. The smaller Non-reportable traders remain staunchly bullish, with a net long of +26,480 contracts.

Open interest and participation

• Open Interest: Total open interest stands at 240,526 contracts, near the lowest level in the provided dataset. This marks a substantial decline of over 35% from the peak of 381,075 contracts seen on January 30, 2026. This sustained drop points to a significant amount of capital leaving the Heating Oil market.
• Trader Count: The number of total reportable traders has fallen to 152, down from over 200 earlier in the year, corroborating the theme of declining participation.
• Concentration: The market shows moderate concentration on the short side. The largest 4 traders by net position hold 15.7% of all short open interest, while the top 8 hold 25.3%.

Price context

The price series provided shows a market in a powerful uptrend throughout 2026, rising from approximately $2.03 per gallon at the start of January to a peak above $4.10 in late April. - The positioning changes for this report occurred during the week ending Tuesday, April 28. In that period, the front-month contract rallied modestly from $3.8457 to $3.8895. - The bearish flows from Managed Money (adding shorts) occurred into this price strength. - Notably, in the days immediately following the "as of" date for this report, the market saw a sharp spike to $4.1229 (April 29) before pulling back to $3.9528 by the end of the week. This suggests the newly added speculative shorts came under immediate pressure.

Risks and watchpoints

• Waning Trend Momentum: The primary watchpoint is the steep and prolonged decline in Open Interest. A strong price trend accompanied by falling participation is often a warning sign that the trend is maturing and may be vulnerable to a reversal. The shrinking net long from Managed Money adds weight to this concern.
• Commercial Hedging: The historically low level of commercial short hedging is a key risk. A sudden increase in producer selling/hedging could act as a significant headwind for prices. Conversely, their current light positioning gives them significant dry powder to add to hedges if prices continue to rise.
• Potential for Volatility: The sharp price spike on April 29, just after the reporting period, highlights the market's volatility. While the overall trend may be losing steam, a market with declining liquidity can be prone to sharp, outsized moves in either direction as remaining participants are forced to cover positions.