{{articledata.title}}

%HedgeFunds around the world have turned extremely bearish on %NaturalGas, betting that the price will fall further in coming months.

Data from the U.S. Commodity Futures Trading Commission shows that hedge fund managers have grown pessimistic on the outlook for U.S. natural gas as prices have fallen to their lowest level since 1990 amid excess supply and unseasonably warm weather in parts of the world.

Specifically, hedge fund managers and traders are taking out options contracts that bet on a continued decline in natural gas prices at Henry Hub in Louisiana.

The grim outlook comes as the gas market remains oversupplied, with inventories 21% above the 10-year seasonal average for this time of year.

The surplus has steadily grown since the winter heating season officially began on Oct. 1, 2023.

Strong El Niño weather conditions in the Pacific Ocean have led to above average winter temperatures across most of Canada and the northern U.S., hurting natural gas demand.

However, domestic gas production in the U.S. has continued to increase despite the fall in prices, adding to the surplus of natural gas held in storage.

Short positions betting on a continued decline in natural gas prices among hedge funds have only ever been higher during the first quarter of 2020 at the outset of the Covid-19 pandemic.

Analysts say they don’t expect a rebalancing in the natural gas market anytime soon given the excess supply and continued production.

Natural gas is currently trading at $1.72 U.S. per MMBtu, down 33% in the last six months.