Natural gas futures jumped as much as 8% on Monday, the biggest rally since September. Cooler forecasts were a small trigger, and the source attributes most of the move to hedge funds buying back contracts against a record short position.
Natural gas jumped as much as 8% on Monday, its biggest rally since September. Futures were at $3.21 per MMBtu, up 7.07% as of 2:26 PM EST on Nov 9, 2026. Bloomberg noted that December futures reached $3.216, the highest intraday price for the front month since Oct 16.
A record short position unwinds
Money managers' short-only position hit a fresh record last week, as traders bet that a Super El Niño would bring the warmest US winter on record. Hedge funds had built a record short position, so a modest shift to cooler forecasts forced them to buy back contracts.
The weather trigger was small. Commodity Weather Group expects normal seasonal weather across the eastern third of the US through Nov 18, with above-normal temperatures returning afterward. Criterion Research estimates the cooler outlook adds 20 to 30 Bcf of demand over two weeks relative to Friday's forecasts, which the source calls minor against inventories.
Exports and curtailments add support
Gas flows to Gulf Coast LNG terminals rose over the weekend, led by Freeport LNG, which had been taking in less gas as power supplies faltered. Meanwhile, output slipped to around 109.5 Bcf a day, the lowest since January, and curtailments are now 2 Bcf a day.
Storage and supply may cap the gains
However, the supply side limits the upside. EBW Analytics' Eli Rubin noted that "higher demand may quickly translate to higher supply as producers taper curtailments."
Storage is also comfortable. The latest report showed inventories 54 Bcf above the five-year average and 109 Bcf (2.8%) below last year. Prices were in the mid-$2.90s late last week, and gas is down 25.52% over one year, far below its 52-week high of $7.827.
Fox Weather has flagged a weak polar vortex that could send Arctic air south later in November or in December, though any impact would take weeks to appear.
Source: Investing.com
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