US natural gas futures ended little changed on Friday as forecasts for slightly weaker power generator demand offset expectations for slightly stronger residential and commercial heating demand. Front-month gas futures on the New York Mercantile Exchange climbed for a second week in a row this week, closing up 0.7 cent on Friday at $2.371 per million British thermal units.
Traders meanwhile have noted for weeks that futures prices were vulnerable to a short-covering rally if the weather suddenly turns colder because speculators could quickly exit their bearish bets. Over the past few weeks, speculators have raised their net short positions to the highest in five years, betting on lower prices. The Commodity Futures Trading Commission will issue its commitments of traders report for this week later Friday afternoon. Although the weather is expected to cool over the next two weeks, both the US and European weather models continue to point to higher-than-normal temperatures through at least late November.