Heating Oil (NY HARBOR ULSD) Futures - COT Report for May 22, 2026

Executive summary

This report covers positioning in the NY Harbor ULSD (Heating Oil) futures market for the week ending May 19, 2026. The primary theme is a continued contraction in market participation, with Open Interest falling to its lowest level in the provided dataset. Against this backdrop of disengagement, Managed Money modestly increased their net long position, primarily by covering shorts. Commercials also slightly reduced their large net short hedge book. Positioning remains far from the extremes seen earlier in the year, and the market appears to be in a consolidative phase after a major price rally from January to April.

Positioning

• Managed Money: Speculative funds hold a net long position of +11,023 contracts. This is a slight increase from the prior week's +9,770 contracts but remains well below the recent peak net long position of +24,377 contracts seen in early February.
• Producer/Merchant (Commercials): Commercial participants maintain a significant net short position of -66,676 contracts. This is a structurally typical position for this group, representing hedging activity. The current level is far less extreme than the peak net short of over -112,000 contracts recorded in late January.
• Swap Dealers: This group holds a substantial net long position of +34,900 contracts, acting as a primary counterparty to commercial shorts. Their net length has decreased from the prior week.
• Nonreportable (Retail): Smaller, non-reportable traders hold a net long position of +26,133 contracts.

Flows and week-over-week changes

Key changes for the week ending May 19, 2026: - Managed Money: Increased their net long position by 1,253 contracts. This move was driven more by a reduction in bearish bets (shorts -861) than by adding new bullish ones (longs +392), suggesting a decrease in downside conviction. - Producer/Merchant: Exhibited a slight reduction in their net short position. The change was a result of liquidating both long (-4,927 contracts) and short (-5,143 contracts) positions, contributing to the overall decline in open interest. - Swap Dealers: Reduced their net long exposure, shedding 1,837 long contracts while also cutting 1,029 short contracts. - Nonreportable: Were notable net sellers, liquidating 2,705 long contracts versus just 662 shorts.

Commercials vs speculators

The classic dynamic of commercial hedgers versus speculators continues. Commercials are heavily net short at -66,676 contracts, while the speculative cohort, led by Managed Money (+11,023) and Nonreportables (+26,133), are net long.

However, the intensity of this positioning has eased considerably since the first quarter. Commercials have scaled back their short hedges significantly from January/February peaks, potentially indicating that current price levels are less attractive for aggressive new hedging. This week, the slight increase in Managed Money net length against a backdrop of commercial liquidation points to a tentative, low-conviction bullish tilt among speculators.

Open interest and participation

• Open Interest (OI): Total market OI fell by 4,657 contracts to 257,101. This marks a continuation of a steep decline from a peak of over 381,000 contracts in late January. The current OI level is the lowest in the provided historical data, signaling a significant withdrawal of capital and interest from the market.
• Trader Count: The total number of reportable traders stands at 157, down from over 200 earlier in the year, corroborating the theme of declining participation.
• Concentration: The largest four traders on the short side control 13.6% of the net position, while the top four on the long side control 9.6%. The short side remains more concentrated, which is typical with large commercial hedgers, but this concentration has diminished since its peak in Q1.

Price context

The positioning changes in this report occurred during a week of relative price stability. The front-month contract closed at $4.1513 on Tuesday, May 19, a modest increase from the prior Tuesday's close of $4.1309. Since the report's "as-of" date, prices have drifted lower, closing at $3.8834 on May 22.

The broader context is a market that experienced a powerful rally from approximately $2.10 in January to over $4.10 by early April. The subsequent period has been one of consolidation, which aligns with the sharp drop in Open Interest as trend-following participants take profits or exit the market.

Risks and watchpoints

• Declining Liquidity: The steep and persistent drop in Open Interest is the most critical watchpoint. A less active market can be prone to sharper price swings on any new catalyst. This trend suggests trader conviction is low and many are waiting on the sidelines.
• Managed Money Re-engagement: The recent increase in net length from Managed Money was driven by short-covering, not aggressive new long positions. A meaningful increase in their gross long position would be a much stronger signal of renewed bullish conviction.
• Commercial Hedging Levels: Commercials are significantly less hedged than they were at lower prices. A sustained price rally above the recent range could trigger a new wave of producer selling, which could act as a significant headwind for prices. Conversely, their lighter hedge book could provide more room for prices to run if a bullish catalyst emerges.