Crude oil bulls slightly increase positions to bet on supply disruptions, WTI net long rises to 78,000 contracts but total open interest shrinks, showing hesitancy

⑴ The weekly position report from the US Commodity Futures Trading Commission shows that as of the week ending July 21, speculative net long positions in WTI crude oil futures and options on both New York and London exchanges increased by nearly 8,000 contracts, with the total climbing to around 78,000 contracts, continuing a recent trend of moderate position building. ⑵ In terms of the breakdown, net long positions on the ICE WTI contract increased by nearly 7,800 contracts, making it the main driver behind the total net long growth, while managed money net longs on the NYMEX contract rose by only about 500 contracts. The divergence between the two suggests position rotation or arbitrage activities across different contracts. ⑶ Notably, despite the increase in net long positions, total WTI open interest shrank by more than 136,000 contracts in a single week, indicating that some existing capital is exiting or reallocating, and that the increase in long positions is more due to short covering than new entrants. ⑷ On refined products, RBOB gasoline net long positions increased by nearly 5,000 contracts to about 74,000 contracts, and heating oil net longs also rose slightly by about 2,800 contracts to nearly 14,000 contracts. The simultaneous rebound in downstream products reflects a phase of restored market confidence in refinery margins and summer travel demand. ⑸ Overall, speculative net longs in crude oil remain in a modest uptrend, but the shrinkage in total open interest along with long-short divergence suggests the market has yet to reach a strong consensus on future directions. In the short term, oil prices remain highly dependent on further developments in geopolitical situations and supply-demand marginal changes.