The latest ICE Commitment of Traders (CoT) report indicates that investment funds lifted their net-long positions (long-term holdings minus short positions) to 97.5 million allowances at the end of last week—a steep jump from just 1 million the week before.

This is the highest level since spring 2021, when speculative net-long positions briefly reached 104 million allowances during a period of strong market optimism driven by discussions on the Green Deal, the “Fit for 55” package, and tightening supply, according to BVBA analysts.

As of last Friday, speculative traders slightly reduced their long positions, trimming them by 0.67 million allowances to 124.4 million. Funds also cut their short positions more sharply—down 1.68 million to 26.9 million, the lowest level since late July 2024.

The sentiment reflected in ICE’s latest report is once again mirrored in market activity, with EUAs ending last Friday 1,18 % higher on the week.

However, the accumulation of large long or short positions can increase market volatility. When traders are caught on the wrong side and forced to unwind their holdings—a phenomenon known as a squeeze (a short squeeze when short sellers rush to cover, or a long squeeze when bullish positions are unwound)—price swings can accelerate rapidly, often resulting in abrupt market corrections.