Natural Gas Bets Drop to Five-Month Low on U.S. Supply

May 19th, 2014

Faster-than-expected gains in U.S. natural-gas inventories are easing concern that a shortage is looming next winter, spurring speculators to cut bullish bets.

Money managers’ net-long position fell 9.1 percent in the week ended May 13 to the lowest level since December, the U.S. Commodity Futures Trading Commission said. Bearish wagers are the highest in more than four months.

Gas futures fell 9.2 percent in the period as stockpile gains topped analysts’ forecasts for a third week. Production from shale deposits in the U.S. Northeast and Midwest climbed to a record 16.1 billion cubic feet a day in the week ended May 9, Credit Suisse Group AG said in a report May 15.

“We’re on the path to a more comfortable supply situation by the end of the summer,” Tom Saal, senior vice president of energy trading at FCStone Latin America LLC in Miami, said by phone on May 16. “That’s giving the bears a little bit of ammunition.”

Natural gas slid 44.1 cents to $4.358 per million British thermal units on the New York Mercantile Exchange in the week ended May 13. Prices fell to $4.289 on May 15, a six-week low, and rose 1.3 percent today to settle at $4.47 in New York.

The Energy Information Administration said inventories rose 74 billion cubic feet in the week ended May 2. Analysts predicted an increase of 70 billion. Supplies climbed by 105 billion the following week, narrowing the deficit to the five-year average to the least since Feb. 28.


By Christine Buurma

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