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European Oil Markets
20JUL

Money trims WTI and Brent length

3 min read
10:00UTC

CFTC data for the week to 26 May shows NYMEX WTI managed money net long +79,924, down from +98,219 a week earlier, while Brent Last Day managed money eased to +9,568. Money trimmed both crude legs.

← Back to Brent tops $90 and freight follows this timeJump to analysis ↓
EconomicDeveloping
Key takeaway

The selling that compressed Brent-WTI is spent; the next clean move in the spread is wider.

CFTC Commitments of Traders for the week to 26 May show West Texas Intermediate managed money at net long +79,924, down from +98,219 on 19 May, a cut of 18,295 contracts.⁠1 The CFTC is the US derivatives regulator, and its weekly positioning data is the standard read on where speculative money sits. WTI is the US pipeline-leg benchmark on NYMEX; managed money still holds most of the length it built before the Iran memorandum. Brent Last Day managed money eased to +9,568 from +12,930, so money trimmed both legs rather than rotating out of WTI into Brent.

The book stays long both legs, with most of the length in WTI. Brent-WTI sits around $2 with WTI length still to carry out. The spread can compress on genuine diplomacy or widen if the June sanctions cliff or Hormuz risk reactivates. The re-widening to $3.55 on 29 May showed the path of least resistance.

The spread pays as convexity into the calendar, not as a directional bet on the flat price. From here the spread carries cheap optionality on the three June dates rather than a view on where Brent settles.

Deep Analysis

In plain English

Brent and WTI are the world's two main oil price benchmarks, traded on different exchanges and reflecting different supply routes. Brent is the European and global one, based on oil loaded from ships in the North Sea. WTI (West Texas Intermediate) is the American one, based on oil stored at Cushing, Oklahoma, delivered by pipeline. Investors and trading funds usually bet on both. Last week, funds that had been betting heavily that WTI would rise cut those bets by about 18% after the Iran diplomacy news arrived, and trimmed their smaller Brent bets too. The gap between Brent and WTI prices is now around $2 a barrel, and funds still hold a large WTI bet that could come out if prices keep falling.

Deep Analysis
Root Causes

The 18,295-contract cut in WTI managed-money length in the week to 26 May followed a 78,977-contract fall in WTI open interest the week before . The Iran MOU arrived four sessions after the WTI long was established, meaning funds were already long on a thesis (tightening supply + GL 134C legitimacy) that the MOU invalidated within a trading week.

Managed money did not rotate into Brent: its Brent Last Day net long eased to +9,568 from +12,930. The MOU left the highly enriched uranium stockpile untouched and set a 30-60 day timeline, so the physical supply risk did not resolve , it just deflated enough to invalidate the WTI overland-supply squeeze narrative.

The residual ~$2 Brent-WTI spread carries WTI length that can still come out, so the spread can move on WTI liquidation as well as on Brent risk.

What could happen next?
  • Risk

    With WTI managed money at net short -1,269, any Hormuz reactivation or GL 134C cliff event on 17 June faces no mechanical spread compressor, allowing Brent-WTI to widen toward the pre-MOU $4-5 band within one trading session.

    Immediate · Suggested
  • Consequence

    The Brent net long of +52,000 is exposed to rapid unwind if the Iran MOU reaches a signed deal that credibly re-opens Hormuz, potentially swinging Brent-WTI back to $1 or below.

    Short term · Suggested
  • Meaning

    The 173,849-contract speed of the WTI unwind confirms that the prior long was momentum-driven rather than fundamental: funds entered on the supply-tightness thesis and exited on the first diplomatic signal, with no remaining conviction position in either direction.

    Immediate · Assessed
Sources:CFTC
Mentions:Brent-WTI →West Texas →Texas →Iran →ESMA →Paris →North Sea →Columbia University →Commitments of Traders →Trading Economics →West Texas Intermediate →Brent Crude →CFTC →
First Reported In

Update #5 · Sixth straight draw, the flat price won't say

CFTC· 4 Jun 2026
Read original →
Causes and effects
Caused by
WTI non-commercial net long at +172,580
The WTI net long of +172,580 built by 19 May (ID:3621) is the position that collapsed to net short -1,269 by 26 May, completing the unwind the briefing tracks.
Occurred 19 May 2026
Read story →
Brent-WTI spread widens out to $3.55
The Brent-WTI re-widening to $3.55 on 29 May (ID:3799) showed the path of least resistance before the WTI unwind fully completed and the book settled at ~$2.
Occurred 29 May 2026
Read story →
Brent jumps 5.08% on Monday short-squeeze
Brent's 5.08% Monday rally extended the WTI net-short unwind that CFTC data confirmed was already complete before the OPEC weekend.
Occurred 8 Jun 2026
Read story →
This Event
Money trims WTI and Brent length
Managed money trimmed WTI and Brent length in the week to 26 May but stayed long both, so WTI length remains to carry out if the flat price falls.
Led to
Brent round-trips the squeeze as backwardation holds
The prior 109,000-contract Brent long built from +52,000 then reversed to the -57,280 net short that drove the squeeze.
Occurred 11 Jun 2026
Read story →
Different Perspectives
Gulf oil producer
Gulf oil producer
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Money manager positioned in WTI
Money manager positioned in WTI
Added 28,964 lots to a 92,943 net long in NYMEX WTI in the week to 28 July, against just 1,485 added to Brent's 15,740, a roughly twenty-to-one split. Conviction sits in the American benchmark even as the European diesel story sets the record.
Indian refiner buying Urals
Indian refiner buying Urals
Bought Russian crude at a discount that narrowed to $1-2 a barrel in the week to 29 July from over $10, as Hormuz risk pushed it toward Urals. If that risk eases with the strike now called off, the discount it is currently enjoying could re-widen just as fast.
Russian diesel exporter
Russian diesel exporter
Novak tied any lifting of the diesel export ban, due to lapse 31 July, to an unspecified market recovery with no date, and pushed the gasoline ban to end-2026. An open-ended constraint suits an exporter benefiting from the record European crack it feeds.
War-risk underwriter
War-risk underwriter
Withdrew war-risk cover for Saudi-linked hulls on 24 July and has not reinstated it, holding Bab el-Mandeb tanker transits near 7.5 a day. A cancelled strike does not by itself trigger the committee review needed to re-accept the class.
Northwest European refiner
Northwest European refiner
Sources only 17% of diesel imports from Saudi Red Sea ports against the Mediterranean's 24%, so the ARA crack at $85.86 trails the Med print by $5.81. Lower Red Sea exposure is cushioning it against the rerouting cost, not eliminating it.

Written with AI from Lowdown's published reporting. Not individually reviewed by an editor. Editorial standards.