Investment funds cut their net long positions as of last Friday, according to the latest Commitment of Traders (CoT) report from ICE released on Wednesday, in line with analysts’ expectations.

Net long holdings fell for a second consecutive week, dropping by 13.5 million allowances, or 11% week-on-week, to 112.5 million allowances — the lowest level since late November.

Speculative traders reduced both long and short positions, a pattern that typically signals a defensive pullback in market exposure. Long positions declined by 17.5 million allowances, while short positions were trimmed by a smaller 4 million.

Analysts had anticipated a reduction in speculative exposure following unusually high turnover last week, which reached 461 million allowances — around 2.5 times the previous week’s volume. Tuesday marked “the busiest-ever day for front-December futures,” according to Carbon Pulse.

Despite the sharp pullback in fund positioning, analysts at BBVA said their outlook remains unchanged. “Episodes like this highlight the importance of looking through short-term noise and refocusing on fundamentals,” they said, adding that they remain constructive and expect higher carbon prices over the medium to long term, citing reduced auction supply as the main driver of the upward trend.