An open contract can be a long or short contract that has not been exercised, closed out, or allowed to expire.
Open interest is really more of a data field than an indicator.
A fact that is sometimes overlooked is that a futures contract always involves a buyer and a seller. This means that one unit of open interest always represents two people, a buyer and a seller. Open interest increases when a buyer and seller create a new contract. This happens when the buyer initiates a long position and the seller initiates a short position. Open interest decreases when the buyer and seller liquidate existing contracts.