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USO is drifting into the new week with short interest still near historic extremes but with the first signs of relief in the lending market, a setup that is meaningfully different from the locked-down conditions documented just one week ago.
The short positioning picture has shifted at the margin. Short interest stood at 93% of free float as of October 6, down from the 96.6% peak recorded on September 30 and off roughly 1.6% on the week in share terms. The absolute level remains structurally elevated: 12.3 million shares short against a thin float, and the ORTEX short score has held in a tight band around 71 for the past two weeks, well into bearish territory. The direction has softened slightly but the conviction behind the trade has not collapsed. This is decompression, not capitulation.
The more notable development is in the lending market, where availability has snapped back sharply. Borrow availability recovered to 30.5% by October 6, up from as little as 1.2% on October 2, when the lending pool was effectively fully used. The week-on-week availability gain of over 1,000% in percentage terms captures how extreme the prior constraint was. Cost to borrow has also eased significantly, falling to 4.8% from a mid-September peak above 36%. Both moves point to fresh supply entering the lending pool rather than shorts being forced out. For comparison: on September 8 and September 16, availability twice touched zero, meaning every share available to lend had been borrowed. The current 30% reading is still tighter than the summer norm but represents a genuine loosening relative to those extremes.
Options positioning adds a consistent layer to the bearish read. The put/call ratio has climbed to 1.58, modestly above its 20-day average of 1.52 and near the top of the recent range, though well below the 52-week high of 2.52. The gradual drift higher in PCR since early August, from around 1.15 then to the current level, mirrors the rebuild in short interest over the same period. Neither is at an extreme that would force a reversal, but both describe a market that has been adding downside protection in measured steps for two months.
Institutional ownership data from June 30 shows Goldman Sachs and Morgan Stanley as the two dominant holders, with Goldman holding roughly 45% of reported shares and Morgan Stanley around 22%. The Healthcare of Ontario Pension Plan entered a fresh 1.1 million share position in the second quarter. These are likely market-making and hedging books rather than directional bets, consistent with USO's role as a trading vehicle for WTI front-month futures exposure. HRT Financial, the 10% owner, filed a cluster of paired purchases and sales around September 14 to 16, totalling net positive shares, but the values involved and the rapid reversal of positions suggest arbitrage activity rather than a directional view.
USO gained 1.1% on the week to close at $144.91, a quiet move given how charged the underlying positioning remains. The key to watch is whether availability continues to rebuild or collapses again toward zero as it did repeatedly through September: each of those collapses was followed within days by a spike in cost to borrow, and the pattern now has enough repetition to be worth tracking closely into the week ahead.
See the live data behind this article on ORTEX.
Open USO on ORTEX →ORTEX Market Intelligence content is generated by AI from a snapshot of ORTEX's proprietary data and reviewed by the ORTEX team. Content is informational only and does not constitute investment advice.
