Vincent Wu
Research Associate, Flux
Sidelined
Brent open interest falls to 8-month lows; specs add length to refined products; CTA net length rises
In the week ending 21 Apr, money managers were risk-on in Brent futures, adding to their long and short positions.
- While shorts increased positions for the third consecutive week, levels remain lower m/m. While the long:short ratio declined further from 7.54:1.00 to 6.66:1.00, overall positioning remain bullish, at the 80th percentile for all weeks since 2013. Notably, open interest declined by 60mb (-2%), falling to its lowest level since August 2025, suggesting increasingly risk-off sentiment from wider participants in Brent.
- Little change in money manager positioning in WTI futures over the week, with positions changing by under 1mb on either side. Nonetheless, net positioning inched higher, and are at their highest levels since July 2025. Short swap positions continue to rise, marking its eighth increase in nine weeks.
- Signs of market fatigue are growing in the crude futures benchmarks, given the contrasting narratives and fluid situation relating to the Iran conflict. The geopolitical risk premium had eased, with market participants pricing in a ceasefire with the view of a resumption of flows in the near future.
Refined product futures
- Total open interest in ICE gasoil futures dropped for the fourth consecutive week, albeit at a slower pace. This was driven by a decline in prod/merc positions, which fell by around 5% over the week. After declining for three consecutive weeks, money managers added long positions to the tune of 4.1mb (+5%), although shorts also saw a small increase of 1.4mb (+4%). As a result, this supported net positioning higher.
- In RBOB futures, money managers added length for the first time in five weeks, and for the second time in ten, with levels rising by 2mb (+3%). However, short positions also rose by 0.4mb (+5%), and given the relatively larger proportional increase, this pressured the long:short ratio lower w/w.
- Money managers accelerated their purchases in ULSD Heating Oil, as short positions rose by 3.4mb (+32%), reaching its highest level in six weeks. However, outright money manager positions remain significantly lower, around 50% below pre-conflict levels, indicating broad risk-off sentiment.
- Open Interest declined in Natural Gas (Henry Hub) futures after three consecutive weeks of rises. Money managers were bullish, adding long positions and trimming shorts. Net positioning therefore rose higher w/w, after falling to a 17-month low. Overall, the US natural gas market is well supplied, with M1 prices falling to their lowest level since November 2024.
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