7,334 Sell Contracts Put U.S. Natural Gas Bets at Their Most Bearish in 6 Years
Key Facts
The U.S. Commodity Futures Trading Commission (CFTC) report showed that money managers held 7,334 sell contracts against 1,616 buy contracts in natural gas futures at the Henry Hub hub on the New York Mercantile Exchange, according to data for October 20. That means this group’s sell positions exceeded its buy positions by more than fourfold, reflecting a crowded bearish bet in the market. The data for that week had already been published on October 23, according to the agency’s schedule, while a Hedgeweek report said the bearish bet had reached its highest level in six years. The positioning comes as attention turns to heating demand during the coming U.S. winter, amid climate forecasts that lean toward warmer conditions in the north. But it does not by itself prove that weather expectations caused investors’ positioning, nor does it mean the expected pattern will apply to the entire United States.
The National Oceanic and Atmospheric Administration (NOAA) forecast above-average temperatures in the northern United States from December 2026 to February 2027, with wetter-than-usual conditions in the south. The outlook varies by region: temperatures close to normal were projected in parts of the Southeast, including Florida, while probabilities lean toward warmth in Northern California, the Pacific Northwest, the Midwest, the Mississippi Valley, broad parts of the East and Alaska. These differences may matter for the gas market because winter’s effect on demand is tied to heating-consumption regions, not a single national average. NOAA also projected more rain in the south and east, and National Weather Service Director Ken Graham said a very strong El Niño tends to push the jet stream south and east, favoring stormier weather in the south. This remains a probabilistic seasonal outlook, not a definitive forecast of actual temperatures or gas consumption.
El Niño indicators provide additional climate context for the winter outlook. NOAA’s Climate Prediction Center said a strong to very strong event persisting through January to March 2027 was likely, with a probability exceeding 83%. The center also estimated an 83% chance that the event would reach historic strength, exceeding the intensity of El Niño events since 1950 under the measure it cited, during October to December 2026. These probabilities describe the phenomenon’s strength and likely trajectory, while the distribution of temperatures and rainfall remains regional and varied. They do not on their own estimate the amount of gas required or the size of the weather effect on positioning. NOAA scheduled its next diagnostic discussion of El Niño for November 12, 2026.
U.S. Energy Information Administration (EIA) data indicate that U.S. dry natural gas production continued to grow year over year, reaching 113.71 billion cubic feet per day in July 2026, up 5.3% from July 2025. It was the 16th consecutive month of year-over-year production growth and the highest monthly average daily production in the data series, which begins in 1973. In its forecasts, the EIA said it expects the average Henry Hub spot price to reach $3.16 per million British thermal units in 2027, down 9% from 2026. It attributed the forecast to expected inventory growth and production gains that offset increased liquefied natural gas exports. These estimates provide additional market context, but they are annual forecasts and do not by themselves explain investors’ positions recorded in October.
On prices, EL7 data showed NGUSD closing at 2.697 on October 27, then rising to 3.047 on October 28. The recorded rebound followed positioning data showing money managers held more sell contracts than buy contracts. The move highlights that one group of traders’ positioning does not necessarily match the price direction in every session. The available data did not include a daily percentage change or a close for the futures contract itself, so the comparison here is limited to the recorded NGUSD closing prices. Positioning remains an indicator of the positions held by the group covered in the report, while price reflects the outcome of trading over the period.
The EIA’s weather estimates show that the national average temperature during the forecast winter will be higher than the previous winter, while heating degree days are expected to be 1% below the average for the previous five winters. The agency said extended cold spells could raise inventory withdrawals above expectations, leaving open the possibility of higher demand if actual weather differs from the seasonal average. This underscores that forecasts for warmer conditions do not rule out cold snaps that affect consumption and inventories. The EIA is scheduled to release its next Short-Term Energy Outlook on November 10, 2026. The new forecast will provide another indication of how the agency assesses the balance between production, inventories and demand during the season.
The CFTC scheduled its next Commitments of Traders report for October 30. The report typically presents data from the previous Tuesday and is released at 3:30 p.m. Eastern Time. The next report will therefore be a new update after the October 20 data were published on October 23, not a pending release of that older data. The agency also announced on October 27 a plan to increase publication of the Commitments of Traders reports from once to twice a week by the end of 2026, while shortening the data lag from three days to two. If implemented, the plan would make positioning indicators available more frequently and closer to the date they were recorded. The October 30 report is the next near-term update, while NOAA’s next diagnostic discussion is scheduled for November 12 and the EIA update for November 10.