Natural Gas Futures (NYMEX) - COT Report for the week ending June 26, 2026

Executive summary

Speculative sentiment in Natural Gas futures continues to shift away from its prior extreme bearishness. For the week ending June 26, Managed Money reduced their net short position for the fourth consecutive week, reaching their least bearish stance in the provided data history. This was driven by the addition of new long positions, suggesting a cautious build in bullish conviction following the prior week's short-covering rally. In stark contrast, Commercials (Producer/Merchant) increased their net short hedging, likely taking advantage of recent price stability to lock in forward prices. Overall market participation saw a significant decline, with Open Interest falling by over 31,000 contracts, indicating a degree of position-squaring and risk reduction across the board.

Positioning (net, extremes vs recent weeks)

• Managed Money (Speculators): Net position stands at -82,722 contracts (202,818 long vs. 285,540 short). This is the smallest net short position held by this category in the available data going back to late 2025 and represents a significant reduction from the recent peak net short of -134,426 contracts seen on May 29.
• Producer/Merchant (Commercials): Net position is -30,615 contracts (238,230 long vs. 268,845 short). Commercials have steadily increased their net short exposure, moving from a net short of just -10,607 contracts a month ago, indicating accelerating producer hedging.
• Swap Dealers: Remain the primary counterparty, holding a large net long position of +192,382 contracts (213,469 long vs. 21,087 short). This position remains near historically high levels, absorbing the net selling from both speculators and commercials.

Flows and week-over-week changes

• Managed Money: Reduced their net short position by 2,187 contracts. The move was constructive, composed of adding 3,768 new long contracts while also adding a smaller 1,581 short contracts.
• Producer/Merchant: Increased their net short position by 2,026 contracts. This was accomplished by cutting 1,990 long positions while adding a marginal 36 short contracts.
• Swap Dealers: Slightly increased their net long position by 1,039 contracts, driven by a larger reduction in shorts (-1,530) than longs (-491).
• Spreading Positions: A significant unwinding of spread positions was noted across multiple categories, particularly Managed Money (-11,364 contracts) and Swap Dealers (-12,585 contracts), contributing to the overall decline in open interest.

Commercials vs speculators

The classic divergence between commercial and speculative players is clearly visible and widening. - Speculators (Managed Money) have been actively covering shorts and reducing their bearish exposure for a month. The week's activity, characterized by adding new longs, marks a potential transition from purely risk-reducing short-covering to tentatively initiating fresh bullish bets. - Commercials (Producers) are acting as sellers into this dynamic. The increase in their net short position to the highest level in over a month suggests they view current price levels as an attractive opportunity to hedge future production against potential price declines.

Open interest and participation

• Open Interest: Total open interest saw a significant decline, falling by 31,487 contracts to 1,613,059. Such a large drop alongside choppy price action suggests a withdrawal of capital and a lack of strong directional conviction from new market entrants.
• Trader Counts: The total number of reportable traders was 303, down from 315 in the prior week's report.
• Concentration: The market remains highly concentrated on the short side. The largest four traders hold 26.1% of the gross short interest, compared to just 18.9% on the long side. This points to a market where the bearish view is held by a smaller group of larger participants.

Price context

The data for this report covers the trading week ending Tuesday, June 23, though the report as-of-date is Friday, June 26. Looking at the price action for the full week ending June 26, the front-month contract was choppy, closing at $3.232/MMBtu. This price level is almost unchanged from the prior report's as-of-date close of $3.238. This consolidation follows a notable rally in the week ending June 22, which coincided with a massive reduction in Managed Money short positions (-29,594 contracts). The more modest positioning adjustments this week suggest that while the impetus for the short squeeze has faded, underlying sentiment among speculators has not reverted to bearishness.

Risks and watchpoints

• Short Squeeze Risk: Despite recent covering, the net short position held by Managed Money remains substantial at -82,722 contracts. Combined with the high concentration on the short side, the market remains vulnerable to a sharp upward move should an unexpected bullish catalyst (e.g., extreme weather forecasts, supply disruptions) emerge.
• Producer Hedging Pressure: The consistent increase in commercial short positions will likely act as a headwind for any sustained rally. Producers appear ready to sell into strength, which could cap upside potential in the near term.
• Open Interest Decline: The sharp drop in open interest is a key watchpoint. If OI continues to fall, it could lead to deteriorating liquidity. A reversal and new build in open interest would be a stronger signal that fresh capital is entering with a directional view.