August natural gas prices had a gap lower open Sunday evening and have been under pressure throughout the initial morning hours. The overnight weakness in natural gas came despite record high temperatures in some parts of the US and 6 to 10 day weather maps that forecast normal to above normal temperatures in the Northwest and Southeast into July 11. Some traders indicated that the market might have already priced in the warm temperatures and could require more to drive prices higher. Meanwhile, the production outlook for natural gas continues to tighten as evidenced by the latest Baker Hughes rig count data that showed another decline to the lowest level in nearly 13 years. The Commitments of Traders Futures and Options report as of June 26th showed non-commercial traders were net short 111,608 contracts, a decrease of 3,833. Non-commercial and nonreportable traders combined held a net short position of 88,469 contracts, for a decrease of 4,735 in their positioning.
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