According to the latest Commitment of Traders (CoT) report published by Ice exchange, investment funds have continued to lower their net short positions (short-long) for the third week in a row, reaching the lowest level so far this year.

Speculative investors have reduced their short positions to 47,1 million allowances last week, down from 49,8 million allowances the prior week. Meanwhile, investors increased their long positions by more than 5 million allowances, reaching a total of 44,6 million allowances. This was the largest weekly gain in long bets since the week ending 16 August.

Short versus Long

Source: Commitment of traders report May-Nov 2024, chart by EMBA Power

As a result, investment funds’ net short positions reached just 2,5 million allowances, dropping from 10,5 million allowances the week before. Net short positions had been declining since the week on 4 October when they reached 26,2 million allowances. 

At this pace, speculative investors could regain a net log position until the end of this year, which means a preference for buying over selling. A net long position in carbon allowances was last seen in the week ending 28 July 2023. Since then, investment funds started selling more than buying.