Lates News

U.S. natural gas futures at one point plunged 5.4%, falling to their lowest level since April. Weekend weather forecasts shifted sharply warmer, indicating that demand for natural gas used for heating and power generation may decline in the early part of the winter heating season. This change in the outlook reinforced traders' expectations that a super El Nio weather pattern could bring unusually warm temperatures this winter, thereby weakening natural gas demand during what is typically the seasonal peak of the year. Hedge funds last week established the largest short position in natural gas since data began being recorded in 2013, making a big bet on falling prices. As the "warm winter" expectation becomes more firmly entrenched, the size of this bet could expand further. Front-month natural gas futures are now down more than 20% from two weeks ago. Dennis Kissler, senior vice president of trading at BOK Financial Securities, said: "Until there is a shift in weather conditions that in turn drives demand growth, the market may continue its 'sell on rallies' trading strategy." In addition, declining trading volume in the soon-to-expire front-month natural gas futures contract may also have amplified the price decline.