Outrageous Predictions
Switzerland's Green Revolution: CHF 30 Billion Initiative by 2050
Katrin Wagner
Head of Investment Content Switzerland
Head of Commodity Strategy
The latest report showed a 53% jump in gross USD longs versus eight IMM futures to $17.5 billion - a 14-month high - up from a $19 billion short just before the Middle East conflict began, highlighting a sharp shift into the most liquid safe-haven asset. This buying occurred despite a small net loss in the dollar on the week, with that weakness accelerating following the Iran–US ceasefire announcement. All eight currency contracts saw net selling, led by CAD ($1.7bn equivalent), JPY ($1.6bn), and EUR ($1.2bn). This resulted in the euro position flipping to a 7.5k contract net short - the first in 14 months - and down sharply from a February peak of +180k contracts, marking a €23.5 billion swing.
The latest COT reporting week to 7 April saw the Bloomberg Commodity Index rise 2%, with gains in livestock and, in particular, energy offsetting weakness across precious metals, grains, and softs. Once again, the primary focus was the energy sector, where the BCOM energy index jumped 6.4%, led by WTI and gasoil (diesel).
In response, managed money traders—including hedge funds and CTAs—maintained a total net long near a four-year high, just ahead of the US–Iran ceasefire announcement. This positioning helps explain part of the subsequent 16% price slump, reinforcing the view that the sharp decline was primarily driven by an overcrowded long rather than any meaningful easing in underlying fundamentals, which continue to point to a tightening physical market.
Across benchmarks, positioning developments were mixed but remained elevated overall. In WTI (ICE + CME), the net long increased by 5.5k to 109.2k contracts, while Brent saw a modest 5.6k reduction to 424.3k, leaving the combined total near a four-year high at 533.5k contracts. A long-short ratio in Brent at 11.3, compared with just 2.6 in WTI, underscores that Brent remains the preferred contract for expressing tightness.
While the ceasefire triggered a sharp correction in the paper market, it has yet to materially alter the physical backdrop. Key indicators—such as elevated prompt spreads and the continued premium in Dated Brent relative to futures—highlight ongoing and, in some cases, rising supply constraints. As such, any additional downside from here is likely to reflect further positioning clean-out rather than a deterioration in core market fundamentals.
The COT reports are issued by the U.S. Commodity Futures Trading Commission (CFTC) and the ICE Exchange Europe for Brent crude oil and gas oil. They are released every Friday after the U.S. close with data from the week ending the previous Tuesday. They break down the open interest in futures markets into different groups of users depending on the asset class.
Commodities: Producer/Merchant/Processor/User, Swap dealers, Managed Money and other
Financials: Dealer/Intermediary; Asset Manager/Institutional; Leveraged Funds and other
Forex: A broad breakdown between commercial and non-commercial (speculators)
The main reasons why we focus primarily on the behavior of speculators, such as hedge funds and trend-following CTA's are:
Do note that this group tends to anticipate, accelerate, and amplify price changes that have been set in motion by fundamentals. Being followers of momentum, this strategy often sees this group of traders buy into strength and sell into weakness, meaning that they are often found holding the biggest long near the peak of a cycle or the biggest short position ahead of a through in the market.