Bloomberg New York: Hedge funds reduced bullish bets on natural gas by the most in eight months as forecasts for warmer-than-usual weather in the eastern US signalled a drop in heating-fuel use with supplies near a seasonal record.
Money managers cut wagers on rising prices for the first time in seven weeks, reducing positions by 56 per cent in the seven days ended February 28, according to the Commodity Futures Trading Commission’s Commitments of Traders report. It was the biggest decline since June 28.
Gas fell 4.1 per cent in the week covered by the report as meteorologists predicted above-normal temperatures east of the Rocky Mountains through mid-March. Inventories may total 2.34 trillion cubic feet (0.07 cubic metres) by the end of the month, according to the Energy Management Institute in New York, an advisory company. That would be an all-time high for this time of year, Energy Department data going back to 1993 show.
“There’s just not enough heating demand to keep a firm floor under the market,” said Tim Evans, an energy analyst at Citi Futures Perspective in New York, in a telephone interview on Friday. “As long as we have the potential for seeing new highs in the inventory surplus, we have the potential for new lows in natural gas prices.”
