With the Northeast and Midwest, as well as parts of the west, experiencing below average temperatures, hedge funds are raising their bets on natural gas. Net-long positions on natural gas were up 27.5% for the week ending January 15 according to the CFTC. Gas prices are up 17% since January 2nd and weather forecasts are predicting below normal temperatures for the last week of January.
Natural gas prices slid 1.5 percent in New York on Jan. 8 on speculation that mild weather would curtail heating demand, leaving stockpiles near a seasonal record. The futures then fell to a 15-week low on Jan. 9 as forecasts turned warmer for the eastern and central U.S. through Jan. 18.
U.S gas production in 2013 will average an all- time high of 69.84 billion cubic feet a day, up 0.4 percent from 69.59 billion estimated in December, the Energy Information Administration said Jan. 8 in its monthly Short-Term Energy Outlook. Supplies may climb 0.9 percent from last year, according to the EIA, an arm of the Energy Department.
Source: Financial Post