US natural gas futures fell to their lowest level since April, closing down significantly on forecasts of a warmer-than-average winter heating season. Market sentiment shifted sharply after predictions indicated substantially milder conditions across the eastern two-thirds of the United States through November 9. Hedge funds increased bearish bets, amassing the largest short position in data going back to 2013, reinforcing expectations that a Super El Niño pattern will suppress demand.
Traders anticipate continued downward pressure, with sentiment described as a "sell the rallies" environment until weather patterns change. The front-month contract settled at $2.602 per million British thermal units, down 1.4% on the day. November delivery expires Wednesday.
Lower trading volumes linked to the front-month contract expiration may have amplified early session declines, though many losses were pared by session's end. Analysts note that without a significant weather shift, bearish momentum is likely to persist through the early winter months.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing