Martha Dowding
Research Associate, Flux
CFTC Weekly: Funds Bullish in Products
Spec shorts unwound fast: gasoil, HO and RBOB saw rising open interest and net length as geopolitics and tariff threats fuelled bullish bets
In the week ending 20 Jan, there was a divergence in positioning across the two crude benchmarks. Brent futures ICE open interest rose to its highest ever level of over 331mb following a 1.61% increase w/w.
- Funds removed 7.35% of their short positions in Brent, while long positions remained flat in the week, pushing net positioning to its highest level since the week to 16 Sep. The managed by money long:short ratio sits at the 17th percentile for all weeks since 2013 in Brent and 11% in WTI. This shows positioning is still relatively short on a historical basis. WTI saw 2.61% and 3.54% reductions in long and short fund positions, respectively, leaving their net positioning almost flat in the week.
- Brent dropped from testing the 200-day moving average and reaching $66.80/bbl on 14 Jan before it softened to close at $63.90/bbl on 20 Jan.
- Refined products saw a fairly uniform movement in positioning in the week to 20 Jan. All of these products saw OI increase, with long and short prod/merc positions rising for a second week.
- Spec positioning was bullish across the products. Fund net positioning in ICE gasoil has risen to its highest level in eight weeks, with open interest at its highest level since April 2025. There was a removal of over 12.90% of the total managed by money short positions in gasoil. This is the largest sell-side removal of risk in 13 weeks. In heating oil, open interest is at its highest in 14 weeks. The percentage increase in length added in the week to 20 Jan in HO is the most significant in 12 weeks, at over +7.45%. Open interest in RBOB also reached new highs following a 1.30% increase. Fund net positioning in RBOB is now at its highest in 6 weeks.
- This en masse removal of speculative short interest in the week was likely due to the geopolitical firestorm last week, as Donald Trump wrote that "help is on the way" for Iranian protesters on 13 Jan, and Iran warned its neighbours it would strike US military bases in these countries in the event of a US attack. This was added to by tariff threats towards Europe from US President Trump on 17 Jan.
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