CFTC: Speculators Cut US Nat Gas Net Longs
May 20 (Reuters) - U.S. natural gas speculators cut net long positions for a third week in four, betting prices would remain low in future months to encourage power generators to burn more of the record high inventory of fuel left after a warm winter.
Speculators in four major NYMEX and ICE markets reduced their bullish bets by 7,892 contracts to 30,627 in the week to May 17, the U.S. Commodity Futures Trading Commission said on Friday.
U.S. gas futures fell for a third week in a row this week, losing about 6 percent during that time.
Gas futures on the NYMEX averaged $2.10 per mmBtu during the five trading days ended May 17 versus $2.11 during the five-trading days ended May 10.
To avoid filling storage caverns to their maximum capacity, with stockpiles at a record 2.480 trillion cubic feet, analysts said prices would have to remain relatively low this year to pressure producers to cut output and encourage power generators to burn more gas instead of coal.
Spot gas prices at the Henry Hub benchmark have averaged $1.95 so far this year, while futures for the balance of 2016 were fetching $2.40. That compares with an average of $2.61 in 2015, the lowest since 1999.
Analysts said, however, they expected gas prices in 2017 to rise enough to encourage drillers to boost output again to meet forecast growth in U.S. pipeline and liquefied natural gas exports and industrial demand.
Gas futures for calendar 2017 were trading around $2.90.
(Reporting by Scott DiSavino; Editing by Meredith Mazzilli and Richard Chang)
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.