Short positions in natural gas reach record levels for the month. Why

Hedge funds are becoming bearish on natural gas ahead of a mild spring, which threatens to reduce demand for the fuel for heating. Short positions across seven natural gas contracts increased by 13,132 contracts to 245,038 in the week ending March 11, according to the Commodity Futures Trading Commission (CFTC). This is the largest increase in the past month. The influx of bearish bets led to a drop in net long positions from a three-year high.

Gas prices surged sharply over the weekend as traders focused on low stocks, but by Wednesday, they fell by more than 8% as the market shifted its attention to the start of the so-called “shoulder season,” when demand typically declines. Forecasts for the end of March show above-normal temperatures, including in the western and eastern parts of the U.S., according to commercial meteorological provider Maxar Technologies Inc.