Heating Oil Futures (NY Harbor ULSD) - Commitments of Traders - Week Ending July 31, 2026

Executive summary

This report covers positioning in the NY Harbor ULSD (Heating Oil) futures market for the week ending July 31, 2026. The key development was a significant bearish shift from Managed Money, driven by a sharp increase in new short positions. This coincided with a general market exit, as total Open Interest fell by over 9,600 contracts. Commercials (Producers/Merchants) also reduced their net short exposure, but this was due to a larger liquidation of long hedges than short hedges. Swap Dealers absorbed some of the selling pressure, increasing their substantial net long position. The price action during the reporting period was choppy but ended lower, consistent with the observed speculative short-selling and overall market liquidation.

Positioning

• Managed Money (Speculators): The net long position decreased to +11,246 contracts (37,032 long vs. 25,786 short). This is a reduction from last week's +13,381 net long but remains more bullish than levels seen in early July.
• Producer/Merchant (Commercials): This group remains the market's primary short hedger, with a net short position of -78,597 contracts (38,687 long vs. 117,284 short). This is a slight reduction in their net short stance from -76,578 in the prior week, driven by significant liquidation on both sides of their book.
• Swap Dealers: Increased their significant net long position to +45,093 contracts (52,922 long vs. 7,829 short), up from +42,682 previously. They continue to act as a major counterparty to commercial short hedging.

Flows and week-over-week changes

• Managed Money: The net position fell by 2,135 contracts. This was not due to long liquidation but rather aggressive new short-selling. Gross shorts increased by 2,433 contracts, while gross longs saw a negligible addition of just 298 contracts.
• Producer/Merchant: This category saw substantial liquidation. They cut 9,282 long contracts and 7,263 short contracts. The larger reduction in longs led to a net change of -2,019 contracts in their position.
• Swap Dealers: Moved in the opposite direction of speculators, with their net position increasing by 2,411 contracts. This was driven by a reduction of 1,302 short positions and an addition of 1,109 long positions.
• Open Interest: Overall market participation declined sharply, with Open Interest falling by 9,609 contracts to a total of 249,594.

Commercials vs speculators

The classic positioning dynamic is firmly in place. Commercials are deeply net short, using the futures market to hedge physical product price risk. Their short position of 117,284 contracts represents 47.0% of the market's total short-side open interest. Conversely, speculators, led by Managed Money, hold a net long position of +11,246 contracts. The large net long held by Swap Dealers (+45,093 contracts) indicates they are providing liquidity and taking the other side of commercial hedging activity, which is then often offset in the swaps market.

Open interest and participation

• Total open interest stands at 249,594 contracts, the lowest level in over a month and a sharp drop from the ~270,000 contract level seen in late June. This continued liquidation signals a reduction in overall market conviction.
• The total number of reportable traders is 164, down slightly from 165 in the prior week.
• Concentration ratios remain moderate. The largest four traders by net position hold 10.7% of longs and 14.4% of shorts, suggesting no single small group has an outsized dominance over the market.

Price context

The provided daily price series shows that the front-month contract closed at $4.1239 on the report's "as of" date, July 31. This is down from the previous Friday's close of $4.2255. The price action during the reporting week was volatile, with a spike to $4.3654 mid-week before falling back. The week's net decline in price aligns with the bearish sentiment expressed by Managed Money adding to shorts and the overall liquidation shown by the fall in open interest.

Risks and watchpoints

• Managed Money Shorts: The addition of over 2,400 new short contracts by Managed Money is the most significant flow this week. It suggests a potential shift in speculative sentiment towards the bearish side. Continued short-selling in subsequent reports would be a strong bearish indicator.
• Liquidation Trend: The drop in open interest to a multi-week low is a key watchpoint. A market that is liquidating rather than building new positions can be prone to sharp moves if a catalyst prompts new money to enter.
• Producer Hedging: Commercials liquidated a significant number of both long and short positions. A slowdown or reversal in producer selling could remove a key source of downward pressure on the market.