Global commodity markets: Commodity open interest fell 3% week on week as energy prices and investor positioning softened

Overview

This weekly J.P. Morgan market-positioning update finds that softer energy prices drove a broad decline in commodity open interest and investor positioning. The report also identifies diverging flows across metals, agriculture and environmental markets, alongside changes in systematic momentum signals.

Core views

The estimated value of open interest across tracked commodity markets fell 3% week on week, or $54 billion, to $2 trillion in the week ending September 25. Energy accounted for most of the decline, losing $47 billion as $24 billion of net contract-based outflows coincided with significant falls in oil and gas prices. Precious-metals outflows and lower gold prices reduced total metals open interest by $10 billion. Despite this volatility, the report notes its economists expect a cyclical uplift and strong growth in 2H26 as PMIs strengthen beyond technology, while higher rates have not yet caused markets or central banks to price growth restrictions. Aggregate net investor positioning across global commodity futures declined 1% WoW, or $2 billion, to $266 billion. Energy net length fell $4.4 billion: investors reduced length in Dubai crude by $6 billion, WTI by $1 billion and ICE Brent by $0.7 billion, partly offset by a $3.8 billion increase in petroleum-products positioning. Agricultural positioning declined $2 billion, chiefly in softs. By contrast, base-metals net length rose $5.4 billion, led by a $5 billion increase in copper, while precious-metals net length declined $0.6 billion as gold fell $1 billion. J.P. Morgan QDS projections as of September 28 pointed to a further $19 billion decline in commodity positioning, led by gold ($9.3 billion), grains ($5.7 billion) and petroleum products ($1.6 billion). Energy open interest declined 5% WoW, or $47 billion, to $928 billion. Crude oil and petroleum-products open interest was reduced by $20 billion of net contract-based outflows and amplified by lower prices. The report notes record-high US diesel prices and the lowest September inventories on record. It argues that an initial 30-day diesel-export ban combined with a Jones Act waiver could rebuild inventories quickly and lower domestic diesel prices and cracks, but that export restrictions could eventually impair US refining capacity once inventories normalize. Natural-gas open interest also fell 5% to $235 billion, reflecting lower European and Asian benchmark prices and $3.4 billion of net contract-based outflows; TTF declined 9.4% WoW. QatarEnergy appeared to increase use of “dark” mode for LNG tankers transiting the Strait of Hormuz and idling in the Gulf, with at least four dark transits during the week and seven September exits bound for or delivered to Asia. The report views this as an improvement from zero August transits, but says activity remains below normal; without clearer transit conditions, it sees tight winter fundamentals, elevated prices and high volatility. Precious-metals open interest fell 3% WoW, or $10.5 billion, to $303 billion, a six-week low. The sector saw $3.2 billion of net contract-based outflows, primarily $3 billion from gold, while managed-money net long positions in COMEX gold futures fell by 5.7 thousand contracts to 127 thousand contracts. Base-metals open interest, however, increased 1%, or $3.2 billion, to $242 billion, with $2 billion of inflows led by $0.7 billion into LME nickel. The report focuses on copper rather than nickel: it identifies diesel availability in South America, El Niño weather risks and a potential Chilean strike as a triple supply-side threat for copper. Nickel NPI cutbacks appear manageable given inventories and weaker Chinese demand, while the rainy season beginning in November could ease water stress. Environmental-market open interest increased 2% WoW, or $1.4 billion, to $89 billion, driven by $2.3 billion of inflows, mainly into EUA contracts, though lower EUA prices partly offset the effect. Investment Funds reduced their EUA net long by 325 lots to 33,783 lots as of September 18. Agricultural open interest was broadly unchanged at $427 billion: price gains in softs and livestock were largely offset by $0.9 billion of net outflows, primarily from grains and oilseeds. The report says the US-China Summit brought little new for agriculture, but lower reciprocal tariffs on approximately $30 billion of goods, including US agricultural products excluding soybeans, could improve the competitiveness of US-origin products and support China’s May commitment to purchase $17 billion of US agricultural products excluding soybeans in 2026, pro-rated to around $9 billion, and in 2027-28. Price momentum weakened across energy and metals and was mixed in agriculture. The short-term NYMEX natural-gas signal switched positive to buy, while short-term signals for TTF, silver and platinum turned negative to sell. The report explains that a momentum z-score crossing zero can trigger buy-to-sell or sell-to-buy changes in stochastic trend-following models, potentially increasing volatility where CTA participation is substantial. Extreme positive or negative momentum can instead produce a neutral signal, which may slow trading and encourage profit-taking or position exits.

Analysis framework

The report combines exchange-position data, Bloomberg data and J.P. Morgan QDS projections to estimate open interest, contract-based flows and net investor positioning across commodity futures. It separates changes caused by contract flows from those caused by price moves, then assesses sector and commodity-level momentum using short- and long-term z-score-based trading signals.

Methodology notes

• Quantitative, Factor, and Portfolio Theory

  Open-interest and contract-flow decomposition

  Open interest is calculated as outstanding contracts multiplied by contract size and latest price; weekly flows use the weekly contract change multiplied by contract size and the prior week's price. This separates positioning flows from valuation changes caused by commodity prices.

• Quantitative, Factor, and Portfolio Theory

  Z-score momentum and trend-following signals

  The report uses optimized lookback periods, momentum z-scores, extreme-momentum thresholds and a mean-reversion filter to generate short- and long-term trading signals. A z-score near zero can switch a signal, while extreme readings can turn it neutral.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Energy commodities

  Primary source of the broad decline in commodity open interest and investor positioning.

  Weaknesses

  Oil and gas prices declined significantly, alongside substantial contract-based outflows.

  Comparison

  Energy open interest fell 5% WoW versus a 1% gain in base metals and broadly flat agriculture.

  Risks

  Tight winter natural-gas fundamentals, constrained LNG transit activity and elevated volatility.

• Copper

  Base-metals positioning increased, with copper leading net-length gains.

  Strengths

  Copper accounted for $5 billion of the $5.4 billion weekly increase in base-metals net length.

  Comparison

  The report prioritizes copper supply risks over nickel concerns.

  Risks

  Diesel availability in South America, El Niño-related weather risks and a potential Chilean strike.

• Gold

  Primary contributor to precious-metals outflows and projected positioning declines.

  Weaknesses

  Gold drove $3 billion of precious-metals contract outflows; COMEX managed-money net length fell by 5.7 thousand contracts.

  Comparison

  Gold positioning weakened while copper positioning increased.

Key data

• Total commodity open interest$2 trillionDown 3% WoW, or $54 billion, in the week ending September 25.
• Aggregate net investor positioning$266 billionDown 1% WoW, or $2 billion.
• Energy open interest$928 billionDown 5% WoW, or $47 billion.
• Natural gas open interest$235 billionDown 5% WoW; TTF fell 9.4% WoW.
• Precious-metals open interest$303 billionDown 3% WoW, or $10.5 billion, to a six-week low.
• Base-metals open interest$242 billionUp 1% WoW, or $3.2 billion.
• Agricultural open interest$427 billionBroadly flat week on week.

Impact & implications

The report portrays the weekly commodity pullback as primarily an energy-driven reduction in prices and investor exposure rather than a uniform move across all markets. Copper positioning strengthened despite identified supply risks, while LNG transit uncertainty, tight winter gas fundamentals and systematic signal changes could keep selected commodity markets volatile.

Risks

• Natural-gas markets face tight winter fundamentals, elevated price levels and high volatility if LNG transit conditions lack clarity.
• Copper faces supply-side risks from diesel availability in South America, El Niño weather effects and a potential Chilean strike.
• A prolonged US diesel-export restriction could ultimately affect US refining capacity after inventories normalize.

What to watch

• Whether LNG tanker transits through the Strait of Hormuz return toward normal levels.
• Further positioning changes projected in gold, grains and petroleum products.
• The short-term momentum signals that turned positive for NYMEX natural gas and negative for TTF, silver and platinum.
• Developments in US diesel inventories, export-restriction proposals and Jones Act waiver discussions.
• Weather, water stress and labor developments affecting copper supply.