The read
In the October 6 report, managed money's net short in natural gas grew by 11,832 contracts to 144,681, equal to 7.9% of open interest. It sits at the 2nd percentile of its three-year range (z-score -1.66), the short end, for a second report running.
Shorts did the work. Managed money added 10,060 short contracts, taking them to 363,473, and held 1,772 fewer longs, at 218,792. That follows last week's 67,217-contract build, and the net short is 48,004 larger than four weeks ago.
November natural gas futures rose 5.34% on the week to Friday, October 9, closing at 3.197. The report counts positions as of Tuesday, October 6, so the later part of that rise is not in it. What it does show is that, as of Tuesday, managed money was still adding shorts rather than covering them.
On Thursday, October 8, the Energy Information Administration reported an 85 Bcf storage build for the week ended October 2, which left working gas 68 Bcf above its five-year average. The report shows the position, not the reason for it.
Natural gas positioning
Natural Gas (Henry Hub): 144,681 contracts net short
Who moved
Managed money added shorts while others covered.
Other reportables cut their net short by 6,938 to 92,373, with 8,868 fewer shorts and 1,930 fewer longs. Producers and merchants narrowed their net short by 5,831 to 8,116, mostly by adding 6,544 longs. Swap dealers stayed net long 227,872, little changed.
These are balances within this futures market, not whole portfolios.
Who holds natural gas futures
Who holds Natural Gas (Henry Hub) futures?
What would change the read
Does the short keep growing?
The next report, for positions as of October 13, is the first to cover the price rise after Tuesday and the storage report. A third report of new shorts would extend this build. Managed money covering from 144,681 would narrow it, and a move off the short end of the range would end this episode.
The anchors
ES · CL · GC
S&P 500
Net short 415,909 contractsLeveraged funds added 30,096 shorts and cut 11,806 longs, so the net short widened by 41,902. It equals 21.3% of open interest and sits at the 19th percentile of its three-year range. Price was at a 12-week high while positioning moved the other way over those 12 weeks.
WTI crude
Net long 104,491 contractsManaged money's net long shrank by 18,425 contracts: 24,913 fewer longs and 6,488 fewer shorts. It is 34,848 smaller than four weeks ago and sits at the 37th percentile of its three-year range.
Gold
Net long 114,820 contractsManaged money's net long shrank by 9,598 contracts: 4,411 fewer longs and 5,187 more shorts. It is 24,728 smaller than four weeks ago and sits at the 29th percentile of its three-year range.
Macro transmission
Another hike was the base case, and the long end held.
The Federal Reserve's minutes on October 7 made another rate hike by year end the base case. The 10-year Treasury auction that day cleared at 5.300% and the 30-year auction on October 8 at 5.618%, and both were bought. The 10-year closed Friday at 5.244%, down 3.3 basis points on the week. The 10-year real yield held at 2.91% and the dollar index rose 0.29% to 102.23.
What that means for the positions above. With the real yield flat, the chain offered gold no relief: managed money's net long fell by 9,598 contracts to 114,820, the 29th percentile of its range and a smaller long than in most weeks of the last three years. In 10-year note futures, leveraged funds added 103,385 short contracts before the auctions, widening the net short by 103,353 to 2,139,785, and the auctions that followed were bought. Natural gas and crude traded on supply news rather than rates; the next block gives the dates.
Geopolitics
The week's events, dated.
- Sunday, October 4: OPEC+ held November oil output unchanged.
- Wednesday, October 7: Hurricane Isaias had shut in about 25% of Gulf of Mexico oil output and 16% of its gas output.
- Thursday, October 8: President Trump posted at 12:43 pm EDT that the US would not attack Iran before the November 3 midterm elections.
- Friday, October 9: Iran said it was reviewing the US reply on Hormuz and would respond in the next few days.
- For the positions in this report: Of these events, only the OPEC+ decision came before the October 6 positions in this report. The next report is the first to show positioning after the hurricane, the post and Iran's review.
Elsewhere
Five other positions worth a look.
The yen short widened as longs left
Leveraged funds' yen net short widened by 10,882 to 25,043, 6.8% of open interest, as they held 11,306 fewer longs and 424 fewer shorts. At the 72nd percentile of its three-year range (z-score +0.55), it is a smaller short than in most weeks of that span. USD/JPY rose 0.20% on the week to 158.24, so position and price moved the same way.
Bitcoin's short is small by its own history
CME leveraged funds are net short 6,852 contracts, 32.0% of open interest, a change of only 4 contracts on the week. The percentile is the 95th, the long end of its three-year range (z-score +1.50), so this is a net short that is small by its own history. Open interest rose 9.4%. Bitcoin fell 2.64% on the week to 82,266, after a third failure under 87,000.
Copper longs left
Managed money's copper net long fell by 17,244 to 61,465, the largest weekly change relative to its own history, almost all of it longs leaving: 15,491 fewer longs against 1,753 more shorts. That ended two reports at the long end of the range, and it now sits at the 76th percentile (z-score +0.93).
Ultra bond shorts covered
Leveraged funds' ultra bond net short narrowed by 82,613 to 726,257, 30.2% of open interest, with 109,656 fewer shorts and 27,043 fewer longs. Open interest fell 4.1%, so positions closed on both sides. It sits at the 22nd percentile (z-score -0.50).
Cocoa shorts narrowed
Managed money's cocoa net short narrowed by 4,824 to 14,494, 6.0% of open interest, with 3,548 fewer shorts and 1,276 more longs. It left the short end of its range after two reports and sits at the 12th percentile (z-score -1.19).
One week later
Natural gas shorts grew again, and the S&P shorts held.
- Last week: would natural gas shorts keep growing? The net short stood at 132,849, at the short end of its range.
- This week: they did. Managed money added 10,060 shorts, and the net short grew by 11,832 to 144,681, a second report at the short end.
- The S&P gross shorts stayed above 495,082. Leveraged funds' gross shorts rose by 30,096 to 530,569, and open interest rose 2.1%.
- The yen short deepened. Leveraged funds' net short widened by 10,882 to 25,043, after last week's cross to net short.
- Copper's net long fell back. Managed money's net long fell by 17,244 to 61,465, ending two reports at the long end of its range.
- Next report: Whether natural gas shorts keep growing after the storage report and the rise since Tuesday, and whether S&P gross shorts stay above 530,569.
Positioning reference
Where positioning sits in its 3-year range.
| Market | Net position | 3-year percentile (z-score) | At this end |
|---|---|---|---|
| Sugar No. 11 | Net long 257,364 (17.5% of open interest) | 100th (+2.28) | 8 reports |
| Gasoline (RBOB) | Net long 96,812 (27.7% of open interest) | 99th (+1.95) | 8 reports |
| Soybeans | Net long 251,660 (18.2% of open interest) | 99th (+1.96) | 7 reports |
| Natural Gas (Henry Hub) | Net short 144,681 (7.9% of open interest) | 2nd (-1.66) | 2 reports |
| Lean Hogs | Net short 35,272 (8.3% of open interest) | 2nd (-1.75) | 19 reports |
| VIX Futures | Net long 5,494 (1.2% of open interest) | 97th (+1.38) | New this week |
| Mexican Peso | Net long 74,927 (25.8% of open interest) | 96th (+1.65) | 11 reports |
| Bitcoin (CME) | Net short 6,852 (32.0% of open interest) | 95th (+1.50) | 2 reports |
How to read the table
Side and unusualness are different questions.
The percentile places each net position among its last 156 weekly readings. It says how unusual a position is, not which side it is on: a net long can sit at the short end of its range, and a net short, like Bitcoin's, can sit at the long end.