Gas Prices Prepare for Further Decline Amid Hedge Fund Short Positions

Natural gas prices are expected to decline further in the coming days and weeks, according to a recent analysis. Hedge funds remain net short on natural gas, while retail traders are still holding onto their long positions, which may lead to a further unwinding of these positions.

The analyst notes that there is an untapped demand zone at approximately $2.36 since 2024, and the current net long position among retail traders indicates that they are hesitant to cut losses. This could result in a continued decline in natural gas prices.

Specifically, the analyst predicts a further decline of -12% over the next few days/weeks, citing the ongoing short hedging by producers and leveraged funds as a contributing factor.