The latest Commitment of Traders (CoT) report from ICE, released on Wednesday morning, showed that investment funds reduced their net long positions (the difference between long and short positions) after they had reached a four-month high in the previous reporting week.

According to data as of last Friday, net long positions declined by 3.7 million allowances week-on-week, bringing the total to 58.5 million allowances, broadly in line with the level recorded in the week ended 19 June.

According to Quantum Commodity Intelligence, “EUA net long positioning eased as the market awaits the EU ETS review.” The publication added that “major changes in positioning are unlikely ahead of the release of the European Commission’s EU ETS review proposals next week.”

The data also show that speculative traders cut their long positions by 2.6 million allowances, reducing the total to 76.4 million allowances, while short positions remained broadly unchanged, rising by just 1 million allowances to 17.8 million allowances.

Net long positions reached a record all-time high of around 126 million allowances in mid-January. Since then, they have more than halved, highlighting a sharp deterioration in investor sentiment and a significant decline in expectations for further upside in EUA prices.