Speculators Pile into Crude Oil Shorts Amid S&P 500 Bearishness

Speculators are growing increasingly bearish on S&P 500 futures while piling into long positions in WTI crude oil, according to the latest Commitments of Traders report from the CFTC. Non-commercial traders, which include hedge funds and other large speculators, expanded their short positions in S&P 500 futures by 67,994 contracts as of September 1, deepening their net short position.

This shift is not isolated to equities; speculators also increased their short positions in treasury and metals futures. On the energy side, traders added to their bullish bets on WTI crude oil, holding a net long position of 123,449 contracts as of August 25. This growing net long position suggests that speculators see demand holding up despite broader economic uncertainty.

The bearish tilt in S&P 500 futures is worth noting because extreme speculative short positioning can actually set the stage for sharp rallies. If the market moves higher against these positions, short covering, where traders buy back contracts to close losing bets, can accelerate the move upward.