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Hedge Funds’ Net Long Positions in US Natural Gas

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Hedge funds  

Hedge funds decreased their net bullish positions in US natural gas futures and options 1.9% to 186,799 on June 12–19. However, the net long positions have increased 239% or by 131,657 contracts YoY (year-over-year). The U.S. Commodity Futures Trading Commission released the data on June 22.

July US natural gas futures fell 1% to $2.95 per MMBtu (million British thermal units) on June 22. The First Trust Natural Gas ETF (FCG) aims to track the performance of an index of companies mainly involved in natural gas exploration and production. FCG rose 2.0% to $23.04 on June 22.

QEP Resources (QEP), Anadarko Petroleum (APC), SM Energy (SM), and Enerplus (ERF) rose 7.5%, 6.7%, 6.7%, and 6.1%, respectively, on June 22. These stocks were the top percentage gainers in FCG’s holdings on the same day. These stocks account for ~14.9% of FCG’s holdings.

Hedge funds’ record high  

Hedge funds’ net long positions in NYMEX natural gas futures and options hit a record high of 245,640 for the week ending May 16, 2017. Since then, the positions have declined ~24%.

US natural gas prices hit $3.02 per MMBtu on June 15—the highest settlement since January 30. Lower natural gas inventories for this time of the year, warmer-than-usual weather, rising exports, and strong demand have helped natural gas prices.

However, natural gas prices have declined ~18.8% since January 29. Near-record natural gas production and mild weather have pressured natural gas prices. 

Open interest  

US natural gas futures contracts’ open interest increased 1.6% to 1,537,670 on June 12–19. The open interest increased by 8.9% or by 126,647 contracts YoY. US natural gas futures contracts’ open interest hit a record high of 1,627,850 for the week ending April 23, 2013.

Natural gas inventories data  

The U.S. Energy Information Administration is scheduled to release its weekly US natural gas inventory data on June 28. A Reuters survey estimates that US natural gas inventories could have increased by 68 Bcf (billion cubic feet) last week.

Read WTI Crude Oil Futures Rise before OPEC’s Crucial Meeting and OPEC Meeting Could Affect US Natural Gas Prices for crude oil and natural gas updates.

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