US natural gas futures jumped Monday morning as forecasts shifted sharply colder across the Mid-Atlantic and Northeast, colliding with the record hedge fund short position we flagged Sunday.
Incoming Cold Blast
"A midweek cold front is expected to bring a noticeable cooldown across portions of the central and eastern Corn Belt. By Thursday and Friday, temperatures will trend toward or below seasonal averages across much of the region, while warmer conditions persist farther west," private weather forecaster BAMWX wrote on X.
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The Squeeze
December futures rose as much as 4.6% to $3.140 per million British thermal units as of 10:45 a.m. local time in New York, reaching the highest intraday level for a front-month contract since Oct. 19.
The latest Commodity Futures Trading Commission report shows that hedge funds amassed record short positions last week on expectations of a warmer fall and early winter due to a Super El Niño.
"Even with the limited fundamental support from weather, the shorts are still being forced to cover, so today could be a wild ride," Tradition Energy analyst Gary Cunningham wrote in a note.
Latest Weather:
Also, some parts of the Mid-Atlantic and Northeast, likely areas at higher elevations, could receive their first accumulating snowfall of the season, according to the National Weather Service's Weather Prediction Center.