Vincent Wu
Research Associate, Flux
CFTC Weekly: Storms and Geopolitics
Short covering flows amplify US natural gas rally; money managers raise bullish crude bets on heightened geopolitical risk
Published: February 2, 2026
Written by:
Vincent Wu
13 page report
In the week ending 27 Jan, money managers added length in both crude benchmarks. Supply tightness concerns and geopolitical risk weighted on sentiment, given the combination of US winter storms disrupting infrastructure, CPC loading issues, and potential US military action against Iran.
- Money managers added 10.9mb (+3%) to their Brent futures length, while shorts declined slightly by 1%. Outright long positions were at their highest level since April 2025. Nonetheless, positioning remains bearish from a historical perspective, with the long:short ratio sitting at the 20th percentile for all weeks since 2013.
- Open interest in Brent futures extended its gains over the week, reaching another record high of 3.38 million lots following a 2% increase w/w. This was driven by substantial gains in prod/merc positioning, with long and short positions rising by 54mb and 93mb, respectively.
- By 27 Jan, price action in M1 Brent rose to a 4-month high of $67.70/bbl as bullish momentum accelerated as prices surpassed its structural 200-day moving average.
- In the refined products, Heating Oil saw the most dramatic w/w positioning change. Long money manager positions rose by 10.0mb, a 31% increase over the week, accompanied by a 4.60% decline in short positions. In addition to natural gas, bullish sentiment from the winter storm filtered into Heating Oil, given its widespread use in the Northeast.
- In a similar trend to the previous week, money managers saw a risk-off week in US natural gas (Henry Hub), where both longs and shorts reduced positions. The increasingly bullish positioning was driven by short covering flows, as positions fell by 74mb (-27%) over the week. This saw the long:short ratio rise substantially on a percentile basis, from the 27th to 66th for all weeks since 2013.
- Price action in M1 Henry Hub surpassed $7/MMBtu last week, reaching its highest level since 2022. Intraday volatility was remarkable, given the wide shadows and relatively thin real bodies as indicated by the daily candlesticks.
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