Speculators boost U.S. natgas net longs to most since May 2014 -CFTC
U.S. natural gas speculators this week boosted net longs for a fifth week in a row, betting prices will keep rising on the possibility there will be less gas than usual in storage at the start of next winter due to low production and rising exports.
Speculators in four major NYMEX and ICE markets added to their bullish bets by 25,776 contracts to 368,859 in the week to April 4, the U.S. Commodity Futures Trading Commission said on Friday.
That is the highest level since May 2014, data showed, and compares with a five-year (2012-16) average speculative net long position of around 127,300. The biggest net long position was 456,475 in April 2013, while the biggest net short position was 166,165 in November 2015, according to Reuters data.
Gas futures on the New York Mercantile Exchange averaged $3.21 per million British thermal units during the five trading days ended April 4 versus $3.06 during the five trading days ended March 28.
After one of the warmest winters on record, inventories ended the November-March withdrawal season at almost 2.1 trillion cubic feet. That compares with a record high 2.5 tcf on March 31 last year and a five-year (2012-2016) average of 1.8 tcf.
Over the summer, however, analysts forecast utilities would add just 1.7 tcf of gas during the April-October injection season, which would be much less than the 2.1 tcf seen on average over the past five years.
If correct, that would leave stockpiles at the end of October just 3.7 tcf versus a record high of 4.0 tcf on Oct. 31 last year and a five-year average (2012-2016) of 3.9 tcf.
The U.S. Energy Information Administration (EIA) in March forecast pipeline and liquefied natural gas exports would rise from an average of 6.3 billion cubic feet per day (bcfd) in 2016 to 8.1 bcfd in 2017 and 9.5 bcfd in 2018. Some analysts expect exports to rise even further this year and next.
That puts the United States on track to transition from a net importer of gas to a net exporter of the fuel on an annual basis in 2017 or 2018. The U.S. was last a net exporter of gas on an annual basis in 1957.
U.S. gas production, meanwhile, has remained at its lowest since 2014 over the past month or so, averaging just 70.1 bcfd during the past 30 days.
Source: Reuters (Reporting by Scott DiSavino and Catherine Ngai; Editing by Chizu Nomiyama and Marguerita Choy)