Commodity positioning and liquidity continue to decline, oil price outlook revised down, metals trends diverge

Overview

This report is J.P. Morgan's weekly global commodities research tracking positions, flows, and price momentum signals in commodity markets. It covers energy, precious metals, base metals, agriculture, and environmental markets. The core conclusion is that as of late June, commodity market open interest notional value and investor net positioning continued to contract, indicating lower risk appetite, while fundamentals and flow signals were clearly differentiated across products.

Core views

First, broad de-risking appeared at the aggregate commodity level: open interest notional value fell 4% week over week and investor net positioning declined 8.6%. Second, the energy market was hit hardest by falling oil prices, with Brent, WTI, and TTF all down week over week, prompting J.P. Morgan to revise down its Brent forecasts for 2H26 and 2027. Third, although precious metals saw gold inflows and an increase in managed money net longs in COMEX Gold, a hawkish Fed weakened the durability of the rebound. Fourth, near-term outflows in base metals were concentrated in copper, but the report still believes the global industrial cycle and Chinese policy support keep the 2H26 demand backdrop favorable. Fifth, outflows in agriculture were mainly concentrated in grains and oilseeds, while rising soft commodity prices partially offset the overall decline in open interest.

Analysis framework

Based on exchange open interest, contract size, prices, investor category positioning, and J.P. Morgan QDS forecasts, the report estimates open interest notional value, weekly flows, and changes in investor net positioning across commodity markets, and combines these with macro views, inventory and demand variables, and price momentum z-score signals to assess potential direction and volatility risk.

Methodology notes

• Flow and positioning estimationOpen interest notional value and weekly flows

  Open interest notional value equals the number of open interest contracts multiplied by contract size and the latest price; weekly flows equal the weekly change in open interest contracts multiplied by contract size and the prior week's price.

  This method is used to distinguish the impact of price changes from contract quantity changes on market size, helping determine whether flows reflect price revaluation or actual position increases or reductions.

• Investor positioningJ.P. Morgan QDS positioning forecast

  When the latest official positioning data are unavailable in some markets, the report uses QDS forecasts to supplement aggregate estimates; for markets without forecasts, it uses the latest reported values.

  This framework is used to assess changes in investor net long or net short positions more promptly, with a particular focus on marginal net positioning changes in energy, precious metals, base metals, and agricultural markets.

• Trading signalsPrice momentum z-score and CTA trend-following signals

  When the momentum z-score approaches 0, trend models may switch from buy to sell or vice versa; when momentum reaches extreme levels, models may turn neutral to stop chasing rallies and selloffs.

  This method is used to identify potential buy/sell switches, profit-taking, or position unwinds by CTAs and trend-following funds, and to signal that related commodity price volatility may intensify.

• Fundamental and macro assessmentInventory, demand, and macro scenario assessment

  The report combines variables such as OECD commercial inventories, energy demand destruction, European natural gas inventories, Asian LNG demand, the global industrial cycle, and Chinese fiscal support to assess price pressures.

  This framework places positioning and flow data in a macro and supply-demand context, avoiding the use of flows alone to explain price trends.

Asset mapping & comparison

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

• Global commodity futures

  The report's core coverage object, used to measure cross-commodity open interest value and changes in investor net positioning.

  Strengths

  Covers energy, metals, agriculture, and environmental markets, reflecting overall commodity risk appetite and liquidity changes.

  Weaknesses

  Aggregate indicators mask differences in supply and demand, macro sensitivity, and capital flows across products.

  Comparison

  Compared with single-commodity prices, combined positioning and flow data better show marginal changes in risk appetite.

  Risks

  If price volatility mainly reflects price revaluation rather than actual capital flows, looking only at open interest notional value may misread position direction.

• Brent/WTI crude oil

  The main contributor to the decline in the energy market and the focus of the report's downgraded price outlook.

  Strengths

  The revised 2026 price path remains above the forward curve, indicating the report is not outright bearish in the near term.

  Weaknesses

  Easing U.S.-Iran tensions reduce the geopolitical risk premium, and demand destruction has exceeded expectations, weakening upside pressure on oil prices.

  Comparison

  Compared with 2026, the report's forecast for average Brent prices in 2027 is lower and below the forward curve.

  Risks

  Renewed geopolitical tensions, inventories falling below expectations again, or recovering demand could change the oil price path.

• Natural gas

  One of the energy sub-sectors, with the report focusing on European and Asian benchmark prices, inventories, and LNG demand.

  Strengths

  Europe's near-term gas balance remains tight, with low inventories and strong Asian LNG demand providing support.

  Weaknesses

  Weekly price declines reduced open interest notional value.

  Comparison

  Compared with crude oil, natural gas risks are more tied to regional inventories, Asian cooling demand, and weather variables.

  Risks

  If an El Nino summer boosts cooling demand, stronger Asian demand could worsen supply-demand tightness.

• Gold/precious metals

  A key precious metals segment tracked by the report, involving gold, silver, platinum, and COMEX Gold positioning.

  Strengths

  There were still net inflows on an all-trader basis, with more visible inflows into gold and increased managed money net longs in COMEX Gold.

  Weaknesses

  A hawkish Fed limits the durability of the safe-haven rebound, and the report believes the pause in precious metals may enter a deeper freeze.

  Comparison

  Unlike base metals, the main pressure on precious metals comes from interest-rate and dollar policy expectations rather than industrial demand.

  Risks

  A more hawkish Fed, rising real rates, or fading safe-haven demand could continue to pressure prices.

• Copper/base metals

  The core product within the base metals segment, where outflows and a bullish price outlook coexist.

  Strengths

  The global industrial upcycle, China's 2H26 growth momentum, and potential fiscal support continue to support demand, with a bullish copper view of $15,000/ton.

  Weaknesses

  Base metals open interest notional value fell 6% during the week, with outflows concentrated in copper.

  Comparison

  Compared with precious metals, base metals depend more on the industrial cycle and Chinese demand; compared with energy, the impact of geopolitical premiums is weaker.

  Risks

  Fed rate hikes, a weaker-than-expected global manufacturing recovery, or insufficient Chinese policy support could weaken demand.

• Agricultural commodities

  The report tracks agricultural products such as grains and oilseeds, soft commodities, and livestock.

  Strengths

  Rising cocoa and coffee prices partially offset the decline in agricultural market open interest.

  Weaknesses

  Overall agricultural market open interest notional value declined, with contract outflows mainly concentrated in grains and oilseeds.

  Comparison

  Compared with energy and metals, agricultural products are more affected by weather, crop supply, and product-specific supply-demand dynamics.

  Risks

  Weather, crop yields, export policies, and trend-following signal switches could amplify price volatility.

• Environmental markets

  Covers carbon allowance markets such as EUA and UK ETS.

  Strengths

  Investment funds increased their net long positions in EUA.

  Weaknesses

  Declines in EUA and UK ETS prices reduced environmental market open interest notional value.

  Comparison

  Compared with traditional commodities, environmental markets are more influenced by policy, regulation, and carbon allowance systems.

  Risks

  Changes in carbon policy, energy prices, and compliance demand could lead to rapid fluctuations in prices and positions.

Key data

• Global commodity open interest notional valueAbout $1.7 trillionAs of June 26, 2026, down 4% week over week, a decrease of about $67 billion.
• Total investor net positioning$179 billionOn the latest available data basis, down 8.6% week over week, a decrease of about $17 billion.
• Energy market open interest notional value$722 billionDown 5% week over week, a decrease of about $36 billion, mainly driven by declines in Brent, WTI, and TTF prices.
• Brent price forecast3Q26 at $86/bbl, 4Q26 at $80/bbl, end-2026 at $78/bbl, and 2027 average at $64/bblThe report says the revised path remains above the 2026 forward curve but below the 2027 forward curve.
• Natural gas market open interest notional value$168 billionDown 2% week over week, a decrease of about $3 billion; the price decline was partly offset by about $1 billion in net contract inflows.
• Precious metals market open interest notional value$242 billionDown 4% week over week, a decrease of about $9 billion; net inflows across all traders totaled $6.5 billion, mainly from gold.
• COMEX Gold managed money net long115.4k contractsAs of June 23, 2026, up 14.7k contracts week over week.
• Base metals market open interest notional value$212 billionDown 6% week over week, a decrease of about $13 billion; contract-based outflows in copper were about $4 billion.
• Copper price view$15,000/tonThe report believes copper still has upside under the backdrop of U.S.-China rivalry and the post-Section 232 review environment.
• Agricultural market open interest notional value$370 billionDown 2% week over week, a decrease of about $8 billion, mainly driven by net contract outflows in grains and oilseeds.
• Environmental market open interest notional value$77 billionDown 1% week over week, a decrease of about $1 billion, affected by declines in EUA and UK ETS prices.

Impact & implications

For investors, the report points to broad de-risking and shrinking liquidity across commodity markets, with short-term price volatility likely driven more by position reductions, CTA signal switches, and macro policy expectations. In energy, easing geopolitical risks and demand destruction reduce upside pressure on oil prices; in precious metals, a hawkish Fed may suppress rebounds; base metals, by contrast, remain supported by the global industrial cycle and expectations for Chinese demand. At the portfolio level, commodities should not be treated as a single-direction trade; the focus should be on differentiating flows, fundamentals, and momentum signals across products.

Risks

• A further hawkish shift in Fed policy could continue to pressure precious metals and affect overall commodity risk appetite.
• Easing tensions between the United States and Iran reduce energy tail risks, but if geopolitical conflict re-escalates, the oil risk premium could rise again.
• If OECD commercial inventories, oil demand destruction, and the impact of energy prices on household purchasing power exceed expectations, the crude oil price path could change.
• If China's 2H26 growth momentum and fiscal support are weaker than expected, support for base metals demand could weaken.
• Low European natural gas inventories, Asian LNG demand, and El Nino summer cooling demand could create upside risk for natural gas.
• When CTA and trend-following models hit momentum z-score switching points or extreme thresholds, they may amplify commodity price volatility.
• Agricultural products are affected by weather, crop yields, and outflows from grains and oilseeds, so short-term direction may be unstable.

What to watch

• Whether subsequent CFTC COT, exchange positioning, and J.P. Morgan QDS forecasts continue to show declining net positioning in energy, metals, and agriculture.
• Whether open interest notional value and contract-based flows in Brent, WTI, TTF, and petroleum products stabilize.
• The impact of Fed policy statements, rate expectations, and changes in real rates on precious metals such as gold and silver.
• Whether the drag from OECD commercial inventories, global oil demand destruction, and energy prices on consumer spending begins to ease.
• China's 2H26 growth data, the scale of fiscal support, and copper price trends after the Section 232 review.
• The impact of European natural gas inventories, Asian LNG demand, and summer weather on natural gas prices.
• Changes in short-term and long-term momentum signals for Kansas Wheat, Cotton, Aluminum, CBOT Wheat, gold, silver, palladium, Gasoil, and cocoa.
• Whether outflows from grains and oilseeds continue, and whether rising prices in soft commodities such as cocoa and coffee can offset pressure in the agricultural segment.