Natural Gas Prices Tumble as Hedge Funds Bet Against Market

Natural gas prices are expected to continue their downward trend, according to recent data from ASX24. The Wallumbilla Natural Gas Futures Contract (GZQ2029) has seen hedge funds remain net short on natural gas, while retail traders hold net long positions.

This divergence in views is significant, as it suggests that retail traders are holding onto their losing positions despite the downward trend. This could lead to a further unwinding of long positions by producers and leveraged funds who continue with short hedging.

A potential decline of -12% over the next few days or weeks has been predicted based on current market conditions. One particular demand zone that remains untapped since 2024 is approximately $2.36, which could serve as a support level for prices to rebound.