US natural gas futures surged up to 5.8% on Monday as cooler weather forecasts triggered short covering across the Atlantic seaboard. The price jump accelerated beyond weather fundamentals as hedge funds with short positions were forced to unwind bearish bets. A record short-only position had been built betting on a Super El Niño bringing the warmest winter on record.
Normal seasonal weather is expected through Nov. 18, with above-normal temperatures returning afterward. Domestic gas flows to US Gulf Coast LNG export terminals rose over the weekend, led by the Freeport LNG terminal, adding upward price pressure. Producer curtailments have fallen to 2 billion cubic feet per day, potentially allowing quick supply increases if demand shocks occur.
December futures rose 16.1 cents to $3.159 per million British thermal units, reaching the highest intraday price since Oct. 19.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing