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Hedge Funds’ Net Long Positions in US Natural Gas Hit 3-Week High

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Hedge funds 

The CFTC (or US Commodity Futures Trading Commission) will release its weekly Commitment of Traders report on Friday, October 27, 2017. In its last report, the CFTC stated that hedge funds’ net bullish positions in US natural gas futures and options contracts rose by 28,519 contracts to 64,692 from October 10-17, 2017. Net-bullish positions rose 79% week-over-week but are down 82,755 contracts or 56% year-over-year.

Hedge funds’ net bullish positions are at three week high. It indicates that hedge funds are bullish or less bearish on US natural gas (UGAZ) (BOIL) (FCG) prices.

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EIA’s US natural gas price forecasts 

The EIA (or US Energy Information Administration) estimates that US natural gas (FCG) (BOIL) (UNG) prices could average $3.03 per MMBtu in 2017 and $3.19 per MMBtu in 2018. The rise in domestic consumption and exports could drive natural gas prices higher. Prices averaged $2.63 per MMBtu in 2015 and $2.51 per MMBtu in 2016. Changes in gas prices affect gas producers’ (IEO) (XES) earnings like Cimarex Energy (XEC), Gulfport Energy (GPOR), and EQT (EQT).

Impact  

Record US crude oil production in 2018 and rise in US natural gas production could lead to an oversupply of natural gas. It would pressure natural gas (DGAZ) prices.

For the latest updates on crude oil, see US Crude Oil Production and Inventories Pressure Oil Futures

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