Natural Gas COT Report: Week Ended October 2, 2026

Executive summary

The CFTC Disaggregated Commitments of Traders report for Natural Gas (NG) for the week ending October 2, 2026, shows a sharp, aggressive re-expansion in spec short positioning. Managed Money cut gross longs by 46,041 contracts and added 21,211 gross shorts, expanding their net short position from -65,547 to -132,799 contracts—a single-week net bearish swing of 67,252 contracts.

Total open interest contracted substantially by 55,017 contracts to 1,782,129, reflecting broad de-risking and spreading liquidation, particularly across speculative accounts. Meanwhile, commercial participants and Other Reportables absorbed this selling, with Other Reportables actively covering 36,891 short contracts while adding 15,871 long contracts. Front-month prompt prices retreated from the $3.25–$3.30 range down to test the sub-$3.00 level before settling at $3.033 on October 2, 2026.

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Positioning (net, extremes vs recent weeks)

• Managed Money: Net positioning stands at -132,799 contracts (220,522 long vs. 353,321 short), with an additional 620,952 spreading contracts (accounting for 34.8% of total open interest). This represents a steep deterioration from the prior week's -65,547 net contracts and pushes net positioning back toward the deeper short levels seen in mid-summer 2026 (e.g., -126,933 on August 7 and -110,630 on August 14).
• Producer/Merchant/Utility: Net short exposure moderated to -14,084 contracts (242,058 long vs. 256,142 short), continuing a trend of relatively balanced commercial hedging compared to earlier in the spring/summer.
• Swap Dealers: Maintained a dominant net long stance of +227,587 contracts (250,787 long vs. 23,200 short), holding near the upper end of their 2026 positioning range.
• Other Reportables: Net positioning sits at -98,221 contracts (55,670 long vs. 153,891 short), recovering from deeper net short exposure of -150,983 contracts the week prior.
• Non-Reportable (Small Traders): Net long +17,517 contracts (55,372 long vs. 37,855 short).

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Flows and week-over-week changes

Category	Gross Long Change	Gross Short Change	Spreading Change	Net WoW Change
Managed Money	-46,041	+21,211	-32,297	-67,252
Producer/Merchant	+2,148	-7,488	N/A	+9,636
Swap Dealers	+2,462	+2,119	-812	+343
Other Reportables	+15,871	-36,891	+4,655	+52,762
Non-Reportables	-1,003	-5,514	N/A	+4,511

Key flow dynamics: * Speculative Long Liquidation & New Shorts: The primary driver of the week was a massive long flush (-46,041) and fresh short addition (+21,211) among hedge funds. * Other Reportable Short Covering: Other Reportables executed a substantial short-covering move (-36,891) while adding length (+15,871), partially cushioning the spec selloff. * Spreading Contraction: Managed Money spreading positions shrank by 32,297 contracts to 620,952 contracts, signaling reduced multi-leg spread activity across the forward curve.

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Commercials vs speculators

Positions as % of Open Interest (All Contracts)
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Category              Gross Long %    Gross Short %    Spreading %
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Managed Money                12.4%            19.8%          34.8%
Producer/Merchant            13.6%            14.4%            N/A
Swap Dealers                 14.1%             1.3%           6.6%
Other Reportables             3.1%             8.6%          12.3%
Non-Reportable                3.1%             2.1%            N/A
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• Speculative Imbalance: Speculators (Managed Money) control nearly 20% of the gross short open interest against only 12.4% on the long side. When combined with their massive spreading book (34.8%), hedge funds control over 67% of gross market participation.
• Commercial Absorption: Commercial entities (Producers/Merchants and Swap Dealers) remain relatively defensive. Producer short hedging is modest at 14.4% (256,142 contracts), well below peak levels seen in Q1 2026 (over 270,000 contracts), suggesting producers are showing less urgency to add structural hedges into recent price weakness.

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Open interest and participation

• Total Open Interest: Declined by -55,017 contracts (-3.00%) to 1,782,129, falling from the multi-month high of 1,837,146 logged on September 25, 2026.
• Trader Breadth: The active trader count dropped slightly from 327 to 324. Managed Money long trader counts fell from 70 to 65, while short trader counts fell marginally from 56 to 55 despite the increase in gross short contract volume.
• Market Concentration:
  • Top 4 Traders: Account for 18.4% of gross long open interest and 24.2% of gross short open interest (8.8% net long, 10.7% net short).
  • Top 8 Traders: Account for 29.0% of gross long and 35.3% of gross short open interest (12.8% net long, 15.6% net short).
  • Concentration on the short side remains noticeably higher, reflecting heavy institutional short concentration in large accounts.

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Price context

Recent NYMEX Natural Gas Prompt Closes ($/MMBtu):
2026-09-22: $3.162
2026-09-23: $3.173
2026-09-24: $3.318
2026-09-25: $3.251  (Prior COT cutoff)
2026-09-28: $3.143
2026-09-29: $3.014
2026-09-30: $3.012
2026-10-01: $2.950
2026-10-02: $3.033  (Current COT cutoff)

Following a late-September rally that peaked at $3.318 on September 24, prompt natural gas prices pulled back steadily throughout the current reporting week, falling to a low close of $2.950 on October 1 before rebounding to $3.033 on October 2. The concurrent drop in open interest (-55,017) alongside falling prices indicates that long liquidation dominated market price discovery over the weekly window.

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Risks and watchpoints

• Short Squeeze Vulnerability: With Managed Money net short positioning widening back out to -132,799 contracts (and gross shorts totaling 353,321 contracts), any unexpected weather or supply disruptions heading into early heating season could trigger swift short-covering rallies.
• Producer Hedging Floor: Producer/merchant gross short positions fell by 7,488 contracts, showing that commercial selling pressure is abating near the $3.00/MMBtu mark.
• Open Interest Trend: If open interest continues to contract alongside stabilizing prices, it would reinforce that the recent leg lower was primarily speculative de-risking rather than structural long-term selling.
• Cross-Market Dynamics: Track related fundamental data streams, including Weather Data, Storage/EIA Balances, and broader COT Positioning Trends.