1APR

Money trims WTI and Brent length

3 min read

16:30UTC

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 Ukraine halves Russia's Baltic oil exports Jump to analysis ↓

ConflictDeveloping

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

Source Landscape

This story draws on neutral-leaning sources

Primary parallel: The July-September 2008 speculative positioning collapse offers the cleanest structural precedent. Brent net longs peaked at +227,000 contracts in July 2008 at $147, then unwound 180,000 contracts in six weeks as demand destruction became undeniable, driving Brent to $40 by December 2008.

The structural parallel is the mirror image of the current situation: in 2008 the unwind was long-to-short driven by demand destruction; in 2026 managed money still held most of its WTI length after the 26 May report, and its Brent Last Day long was small.

Counter-parallel: The 2014-15 Saudi-driven oversupply did not produce a positioning-led price recovery: managed money rebuilt Brent longs twice between January and September 2015, only to be wiped out both times as Saudi production stayed high. The lesson for 2026 is that a positioning long on seaborne Brent is only durable if the physical supply constraint , Hormuz , actually persists, not merely if traders believe it will.

Managed money still held +79,924 net long in NYMEX WTI on 26 May, so WTI length remains available to carry out if the flat price falls further, which would widen Brent-WTI from the WTI side.

The TC2 (US-to-UK petroleum products) freight route is a secondary indicator: when Brent-WTI widens, European refiners face a relative cost disadvantage on US crude imports, pushing them back to spot North Sea crude and compressing the Brent-dated contango. The current $2 spread is at the lower end of the range where TC2 arb is viable, suggesting the transatlantic crude trade is marginal in both directions.

Consensus view: The CFTC data show an 18,295-contract cut in NYMEX WTI managed-money net length in the week to 26 May, to +79,924: a trim of the 19 May book, not a forced liquidation of it.

Funds that built the WTI long on the 7.9mb draw and GL 134C legitimacy still held most of it after the Iran MOU hit.

Counter-view: ESMA's quarterly derivatives market report for Q1 2026 documents that European institutional holders increased ICE Brent long exposure by 18% through April, a build that predates the WTI unwind. Paris-based Kayrros, which tracks satellite-visible crude stocks, argues the Brent long is durable because it reflects physical scarcity in seaborne markets, not a momentum trade , and will not unwind on Iran diplomacy alone without a visible tanker queue clearing Hormuz.

Key tension: Whether the Brent Last Day net long of +9,568 rests on genuine physical scarcity or on geopolitical optionality, since the two have very different unwinding profiles once a deal is signed.

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

Bulgarian government

Bulgaria's Prime Minister, Rumen Radev, said the sinking of HS Dignity "benefits the Russian Federation" while saying Bulgaria lacked solid evidence to accuse anyone, and Defence Minister Dimitar Stoyanov asked NATO for air defence on 16 October. The request comes from a government that stopped state military aid to Ukraine in June.

Radoslaw Sikorski

Poland's foreign minister challenged Elon Musk on X after SpaceX capped Ukraine's Starshield terminals on 14 October. Poland pays about $50m a year for Ukraine's Starlink subscriptions, so Warsaw speaks as the paying customer as well as the ally.

Andy Burnham

Burnham fast-tracked £10m of a £45m air-defence missile delivery when Zelenskyy visited London on 14 October, and his ministers are lobbying allies to ban maritime services for Russian liquefied natural gas. The measure targets insurers and shipowners, many of them in London, rather than the gas itself.

Ministry of External Affairs (India)

India's foreign ministry said after the 16 September House vote that New Delhi would take all necessary measures to protect its trade.

European Council

EU leaders on 15-16 October rejected a US idea to hand Washington the roughly €200bn of frozen Russian assets held in Europe, and Kaja Kallas said the decision belongs to Europeans. The same summit put off a decision on financing Ukraine, saying leaders "will revert to the issue in a timely manner".

Donald Trump

Trump signed the 16 October order that sets the Graham Act's duties and waives them under section 115(a), with a certification sent to Congress. He says the United States has not stopped sharing intelligence with Ukraine, and on 11 October he said both sides had agreed to halt attacks on energy infrastructure.

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