The latest Commitment of Traders (CoT) report from ICE, published on Wednesday morning, shows that investment funds reduced their net long positions (long minus short) for the third consecutive week.

According to market data as of last Friday, net long positions declined by a further 3.95 million allowances week on week, bringing the total to 32.45 million allowances — the lowest level since the end of March.

The breakdown shows that long positions fell by 2.28 million allowances week on week, bringing total long holdings down to 56.68 million allowances. At the same time, short positions moved in the opposite direction, increasing by 1.67 million allowances to 24.23 million allowances. The combination of declining long exposure and rising short positions points to a further weakening in bullish sentiment towards the carbon market.

Over the past month, investment funds’ net long positioning has declined by nearly 23%. Despite this significant reduction in bullish positioning, carbon prices rose by around 2% over the same period, in line with the upward trend typically observed in August.