192,728 Contracts Put U.S. Natural Gas Bets at Their Most Bearish in 6 Years
Key Facts
U.S. natural gas speculators’ net short positions rose to 192,728 contracts in the Commitments of Traders report published on October 23, the most bearish level in more than 6 years, according to Bloomberg coverage via Yahoo Finance. Over the same period, bullish bets fell to their lowest level in about two years. Net short positions indicate that bearish bets exceed bullish ones, while a decline in bullish bets reflects fewer positions wagering on higher prices. The moves come amid a sharp selloff in U.S. futures. They fell more than 15% in the week ended October 23, the biggest weekly decline since February.
Money managers alone held 599,731 short contracts across 7 standard Henry Hub contracts, a record in the data series dating back to May 2013, according to Bloomberg. This figure measures total short exposure across those contracts, so it differs from the net short position of 192,728 contracts. U.S. Commodity Futures Trading Commission data for the money manager category in natural gas contracts on the Intercontinental Exchange show a different picture: long positions fell by 15,048 contracts and short positions by 31,291 contracts between October 13 and 20. These are data for natural gas contracts on that exchange, not the standard Henry Hub contracts measure used for the record exposure figure. The difference means that any description of positioning depends on the trader category, contract and measure used.
The bearish bet is linked to expectations for an unusually mild Northern winter, which could limit gas use for heating and power generation, according to Bloomberg. Commodity Weather Group expects October and November to be the third-warmest months in its records, which extend back to 1950. The National Oceanic and Atmospheric Administration also forecast above-normal temperatures across the northern United States from December 2026 to February 2027 in its outlook issued on October 15. Ken Graham, director of the National Weather Service, said a very strong El Niño pattern is likely to shift the jet stream south and east over the contiguous United States, tilting the odds toward stormier weather in the South. The Energy Information Administration’s estimate assumes heating degree days this winter will be close to last winter’s level and 1% below the average of the previous five winters.
Inventory data present a mixed picture: the United States added 77 billion cubic feet of working gas in the week ended October 16, bringing the total to 3,644 billion cubic feet. Inventories were 152 billion cubic feet below their level in the same period a year earlier, but exceeded the five-year average of 3,609 billion by 35 billion, according to the Energy Information Administration. The agency estimated inventories would reach 3,850 billion cubic feet by the end of October, 2% above the five-year average as the heating season begins on November 1. It said abundant inventories relative to that average limit upward pressure on prices in its outlook. It also linked supply to production growth alongside rising liquefied natural gas exports and domestic demand.
The Energy Information Administration expects U.S. dry natural gas production to rise from 112.20 billion cubic feet per day in 2026 to 116.13 billion in 2027, while liquefied natural gas exports increase from 17.6 billion to 18.6 billion cubic feet per day. On prices, it expects the Henry Hub spot price to average $3.16 per million British thermal units in 2027, down 32 cents, or 9%, from 2026. It estimates the average price from February through December 2027 at $3.09 per million British thermal units. The agency, however, warned that extended cold spells could lead to inventory withdrawals above its forecasts. Winter Storm Fernanda pushed the Henry Hub average price to $7.72 per million British thermal units in January 2026, when heating demand lifted prices as supply tightened.
The risk of a reversal remains as short bets build up; a sudden, severe cold snap could increase demand and reduce production, pushing prices higher as traders rush to close short positions, Bloomberg warned. The Energy Information Administration also said prolonged cold could drive inventory withdrawals above its estimates. The agency assumes national temperatures will be broadly similar to last winter, with greater warmth in the Northeast and colder conditions in the West compared with the previous period, while a strong El Niño could produce wide deviations from that assumption. The next weekly storage report is scheduled for October 29. The agency’s next update to its short-term energy outlook is due on November 10, 2026.