The latest Commitment of Traders (CoT) report from the ICE platform, released on Wednesday, indicates that investment funds trimmed their net long positions (the difference between long and short positions) for the seventh consecutive week.

Net long positions declined by a further 10.89 million allowances week-on-week, equivalent to roughly 17%, according to market data as of last Friday. This reduced the total to 52.36 million allowances, the lowest level since late August.

The new level of investment funds’ positions is about 2.5 times lower than the all-time high of 126 million allowances recorded in mid-January, highlighting how quickly participation in the carbon market has shifted in just two months.

The lower net length reflects a combination of declining long holdings and rising short positions. Speculative traders reduced long positions by 6 million allowances to 93.8 million, while short holdings increased to 41.4 million allowances, the highest level since early May.

Meanwhile, the document showed that compliance buyers increased both their long and short positions compared with the previous week, as coal continues to be favoured over gas for power generation, according to Carbon Pulse.

The Commitment of Traders (CoT) report is a weekly publication released by ICE every Wednesday, providing a snapshot of the positions held by different market participants based on data from the preceding Friday. The document serves as a sentiment indicator, helping traders understand how large investors and compliance buyers are positioned regarding future price movements.