Heating Oil Futures (NY HARBOR ULSD) - Commitments of Traders for week ending 2026-05-08

Executive summary

This report covers positioning in NY HARBOR ULSD (Heating Oil) futures for the week ending May 8, 2026. Speculative sentiment cooled slightly as Managed Money trimmed their net long position, primarily by adding new shorts. Conversely, Commercials (Producer/Merchants) significantly reduced their net short position to the lowest level in the provided dataset, driven by aggressive short covering. This divergence—speculators turning slightly more cautious while commercials reduce their hedges—created a complex dynamic. Open interest saw a minor increase, but overall participation remains well below the highs seen earlier in the year. The price action was volatile, with a mid-week drop followed by a partial recovery, ultimately ending the week slightly lower.

Positioning (net, extremes vs recent weeks)

• Managed Money: The speculative net long position stands at +11,779 contracts. This represents a continued decline from the peak bullishness seen in March (above +24,000 contracts) and marks one of the least bullish stances for this category in several months.
• Producer/Merchant (Commercials): This group holds a net short position of -65,930 contracts. This is a significant development, as it is the least net short they have been over the entire historical period provided (dating back to December 2025). Their peak net short was over -112,000 contracts in late January.
• Swap Dealers: Remain heavily net long at +36,393 contracts. This position serves as a primary counterparty to commercial hedging and has been relatively stable in recent weeks.

Flows and week-over-week changes

• Managed Money: Flipped more bearish this week, reducing their net long position by 720 contracts. This was not due to long liquidation but rather a more aggressive addition of new short positions (+2,009 contracts) which outpaced the addition of new longs (+1,289 contracts).
• Producer/Merchant: Became significantly less bearish, increasing their net position by 1,174 contracts. This was almost entirely driven by covering short positions (-1,169 contracts), while their long side was nearly unchanged (+5 contracts).
• Swap Dealers: Lightly trimmed their net long position by 564 contracts, driven by a reduction in both long (-1,757) and short (-1,193) positions.

Commercials vs speculators

The classic positioning dynamic shows a notable convergence. - Speculators (Managed Money) have been steadily reducing their bullish bets since the price rally in March, suggesting a belief that the upside may be limited from current levels. The addition of fresh shorts this week underscores this cautious sentiment. - Commercials (Producer/Merchants), who are natural sellers to hedge future production, have dramatically scaled back their hedges. Their net short position of -65,930 is a fraction of what it was a few months ago. This can imply that they either see less downside price risk, have already hedged sufficiently, or are experiencing strong physical demand that reduces the need for paper hedges. This reduction in selling pressure is a constructive signal.

Open interest and participation

• Open Interest (OI): Total open interest rose by a modest 2,201 contracts to 242,727.
• Context: While OI increased this week, it remains severely depressed compared to the levels above 380,000 contracts seen in late January. The market has undergone a significant liquidation since February, and participation has not yet meaningfully recovered. This lower liquidity environment could potentially exacerbate price swings.
• Concentration: The largest four traders control 15.0% of the net short side, versus 10.6% on the long side. This reflects the typical market structure where a few large commercial entities are the dominant hedgers on the short side.

Price context

The price series provides valuable context for this week's positioning changes. - During the reporting week (May 4 - May 8), the front-month contract experienced significant volatility. After closing the prior week at $3.9750, prices pushed to a high of $4.0767 on Tuesday before dropping sharply to $3.7806 on Wednesday. The market then recovered to close the week at $3.9176. - The 1.4% decline over the reporting week aligns with the slightly more bearish tilt from Managed Money. The addition of over 2,000 new short contracts from this group was likely a reaction to, or a driver of, the sharp mid-week price decline. The substantial short-covering from commercials may have provided underlying support that prevented a more severe breakdown.

Risks and watchpoints

• Diverging Views: The key watchpoint is the divergence between speculators reducing bullish exposure and commercials reducing their hedges. If speculators continue to sell while commercials are no longer covering shorts, it could lead to renewed downward price pressure.
• Commercial Hedging Floor: Commercial net shorts are at a multi-month low. A pause or reversal in this trend (i.e., a return to aggressive selling/hedging) would be a strong bearish signal for the market, indicating that producers once again see significant downside risk.
• Managed Money Capitulation: The Managed Money net long is thinning but remains positive. A decisive move into net short territory by this group would signal a major shift in speculative sentiment and could precede a deeper price correction.
• Low OI Environment: The low overall open interest must be monitored. A lack of new participation could stifle any sustained trend, while a sudden catalyst could cause outsized moves in a less liquid market.