Heating Oil (NY Harbor ULSD) COT Report: Week Ending June 5, 2026

Executive summary

This week's report reveals a significant build in bullish conviction from speculators, running directly into increased hedging from commercial players. Managed Money added aggressively to their net long position, primarily by initiating new longs. This occurred as prices rallied modestly over the reporting period. Conversely, Producers/Merchants deepened their net short exposure, using the price strength to add hedges. Open interest saw only a marginal increase, suggesting this week's activity was more of a transfer of risk between participants than a major influx of new capital into the market. The growing divergence between speculative bulls and commercial hedgers is a key dynamic to watch.

Positioning

• Managed Money holds a net long position of +11,997 contracts (30,147 long vs. 18,150 short). This is a substantial increase from the prior week's +7,689 net long and marks a return to a more bullish stance, though it remains well below the highs of over +24,000 contracts seen in February 2026.
• Producer/Merchants (Commercials) are significantly net short at -67,843 contracts (45,811 long vs. 113,654 short). This represents a slight increase in their net short position from the previous week and is a classic hedging posture. This level of shorting is substantial but is not an extreme compared to the -112,000 net short seen in late January 2026.
• Swap Dealers maintain a large net long position of +36,657 contracts (49,119 long vs. 12,462 short), which was largely unchanged from the prior week.

Flows and week-over-week changes

• The most significant flow came from Managed Money, who increased their net long position by 4,308 contracts. This was driven by a strong addition of new long positions (+4,876 contracts), while shorts also saw a minor build (+568 contracts). This indicates a clear directional bet on higher prices.
• Producer/Merchants increased their net short position by a net 1,131 contracts. This was the result of liquidating longs (-3,557 contracts) at a faster pace than they covered shorts (-2,426 contracts).
• Swap Dealers slightly reduced their net long exposure by 203 contracts, a negligible change.
• The overall market saw a small inflow of contracts, with total Open Interest rising by 1,078 contracts.

Commercials vs speculators

The classic divergence between hedgers and speculators intensified this week. - Speculators (Managed Money) are positioned for a price increase, having bought aggressively into the week's rally. Their gross long position of 30,147 contracts is now significantly larger than their short position of 18,150 contracts. - Commercials, who represent the physical market, are positioned for a price decrease or are hedging physical product. Their gross short position of 113,654 contracts dwarfs their long position of 45,811, and they used the recent price strength to increase that hedge. This dynamic highlights a market where financial participants anticipate further upside while industrial users see current prices as an attractive level to sell forward.

Open interest and participation

• Total open interest stands at 249,449 contracts, marking a multi-month low and suggesting that overall market participation has thinned since the winter highs of over 380,000 contracts.
• The week's modest OI increase of 1,078 contracts, despite the large shift in Managed Money positioning, indicates that much of the activity was existing participants shifting their exposure rather than a wave of new entrants.
• The total number of reporting traders is 164, down from over 200 earlier in the year, which is consistent with the lower open interest.
• Concentration levels are moderate. The 8 largest traders account for 22.2% of the net short position and 15.0% of the net long position, which does not signal an overly crowded trade among the largest players.

Price context

The positioning changes occurred during a bullish week for Heating Oil futures. - The front-month contract closed at $3.5874 on the report's as-of-date of June 5, up from $3.5129 on the previous report date of May 29. - This represents a 2.1% increase over the reporting period. - The aggressive buying from Managed Money (+4,308 net contracts) was consistent with this price rally, suggesting momentum-following behavior. The increased hedging from Commercials is also logical, as producers often use price rallies to lock in future sales.

Risks and watchpoints

• Speculative Unwind Risk: The sharp increase in Managed Money longs (+4,876 contracts) in a single week makes the market vulnerable to a rapid sell-off if the bullish narrative falters. A reversal in price could trigger a quick liquidation of these new positions.
• Commercial Short Base: The large commercial net short position (-67,843 contracts) can act as a floor for the market. Any unexpected supply tightness or bullish catalyst could force these hedgers to buy back their shorts, potentially fueling a sharp rally.
• Watch Open Interest: A continued price rally without a corresponding, significant increase in open interest might suggest a lack of new buying power and could indicate the trend is becoming exhausted. A breakout to new highs accompanied by a surge in OI would be a much stronger bullish signal.