US natural gas speculators cut their net long positions for a sixth week in a row on forecasts the weather will remain warmer than normal for the rest of the winter, keeping demand light and stockpiles high.
Speculators in four major NYMEX and ICE markets reduced their bullish bets by 6,084 contracts to 250,723 in the week to February 28, the least net longs since early December, the US Commodity Futures Trading Commission said on Friday.
That marks the longest streak of weekly declines in net longs since August 2014.
That 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 $2.66 per million British thermal units during the five trading days ended February 28 versus $2.79 during the four trading days ended February 21. The week ended February 21 had only four trading days due to the Presidents Day holiday.
The latest long-term forecasts call for warmer-than-normal temperatures and light heating demand to continue for the rest of the winter. Analysts said that warmth should allow utilities to leave more gas in storage, reducing the threat of price spikes later in the year.
Gas stockpiles are about 14 percent above the five-year average and will probably remain over that norm for a few more weeks if those warmer-than-normal winter forecasts prove correct.