How to Read the Crude Oil COT Report: Start with the WTI Contract
Before reading a crude oil COT report, check which crude oil contract it covers. “WTI” is not enough to identify a single position series. Tradingster has separate reports for WTI Physical and WTI Financial Crude Oil, and their figures should not be swapped into the same historical comparison.
The WTI Financial Crude Oil COT report uses code 06765A. The WTI Physical COT report uses 067651. That final character is a meaningful difference, not a variation in the URL’s spelling.
Identify the market and the report format
The report heading gives you the contract name, exchange and position date. Record those details together with the trader category and whether the data is futures only.
Both linked Legacy reports use commercial and non-commercial categories. For a more detailed breakdown of the physical contract, the Disaggregated WTI Physical report separates Producer/Merchant/Processor/User, Swap Dealers, Managed Money and Other Reportables.
A report can be internally correct yet answer the wrong question for your research. A Managed Money figure for WTI Physical is not the same series as a non-commercial figure for WTI Financial. Differences between them should not be described as weekly changes in “oil positioning.”
Once you select a series, keep it fixed. A note as simple as “067651, Disaggregated, Managed Money, futures only” prevents a surprising number of mistakes.
Read long and short changes before the net total
Consider a hypothetical trader category in one consistently defined WTI report:
| Position | Previous report | Current report | Change |
|---|---|---|---|
| Long contracts | 250,000 | 235,000 | −15,000 |
| Short contracts | 90,000 | 120,000 | +30,000 |
| Net position | +160,000 | +115,000 | −45,000 |
The group’s net-long position declined by 45,000 contracts. Reported longs fell while shorts rose. The group remained net long by 115,000 contracts.
That is more precise than saying “oil traders went short.” Some exposure did move in the short direction, but the category’s total balance did not cross below zero.
Now imagine a different week in which longs are unchanged and shorts rise. The same net decline could have a different composition. The long and short columns tell you which description fits the reported endpoints; neither description reconstructs all trading between them.
Do not read a producer’s hedge as a standalone forecast
Physical-commodity businesses can use futures to manage risks arising from their operations. An illustrative oil producer might use short futures against expected sales. Another business might need protection against the cost of buying a commodity later.
A position makes more sense when considered with the exposure it is intended to offset. A short hedge can be useful even when the business does not expect an imminent price fall.
The report does not give you each participant’s complete physical inventory, contracts, financing or other market positions. You therefore cannot infer its overall business risk—or its forecast—from one futures column.
The same caution applies to swap dealers. Their futures holdings may relate to exposures created by swap transactions, rather than a simple directional view on the oil price.
Separate position changes from changes in market size
Suppose net longs fall from 160,000 to 120,000 contracts while open interest falls from 2 million to 1.5 million. The net position has declined by a quarter, but it remains 8% of open interest in both observations.
That hypothetical example does not mean nothing changed. The absolute balance is smaller. It means that a statement about reduced contracts and a statement about reduced relative exposure are not identical.
Check the long and short percentages shown in the report, and calculate a net share only with the matching open-interest figure. Do not use one WTI contract’s positions with another contract’s denominator.
What spreading does—and does not—show
Where the report provides a spreading column, it represents matched long and short positions within the report’s rules. It is not another directional long total.
A trader can have offsetting positions while still taking risk on a relationship between contracts. A low net position therefore does not imply no market activity or no risk.
The aggregate report also does not reveal every individual calendar-month strategy. Avoid inferring a particular trade in the oil futures curve from a change in the spreading total alone.
Align oil news with the position date
COT reports normally describe Tuesday positions and are released later in the week. A supply announcement or price shock after Tuesday belongs to a later information set.
When reading the report, first describe the change up to its “as of” date. Then consider subsequent events separately. Otherwise, it is easy to give an earlier position change a story built around news that had not happened yet.
For a wider energy comparison, the natural gas COT report is another available series. It is a separate market, not a substitute for WTI, and its raw contract counts should not be used as though they share the same scale.
A sound crude oil reading starts with an exact contract and ends with an exact observation: which group changed, how longs and shorts moved, and how the result compares with that series’ history. A price forecast requires additional reasoning beyond those facts.
Methodology: Commodity trader categories and spreading definitions follow the CFTC’s Disaggregated report notes. Numerical and business examples are hypothetical. This article is educational, not a trade recommendation.
