John Kemp took a few weeks off for the holiday but he offers up some thoughts on the hedge fund space from last week, which still has some, if not more relevance this week based on trading activity. First, on the natural gas front:
“Investors have amassed the largest bullish position in U.S. natural gas futures and options for nearly three years, as production declines and surplus inventories inherited from last winter disappear…Funds have become more bullish as domestic production fell while consumption by electricity generators and exports both climbed to record highs in 2024, depleting excess stocks carried over from the mild winter of 2023/24. With more than half the winter heating season still ahead, the surplus will continue to erode and likely disappear completely before the end of March 2025.”
Now, on to Petroleum:
“Fund managers held a net long position equivalent to 404 million barrels (25th percentile for all weeks since 2011) on December 31 up from a record low net short position of 34 million barrels on September 10. The combined position was the highest for nearly six months though still moderately bearish overall.”
On the propane front, the daily closing average at Conway on December 24th was .7250, and .7600 for TET. Compare that to yesterday’s Conway average closing at .8513 and TET at .8620, which is actually down more than a penny from Monday’s closing averages.
Cold weather is finally a story for much of the nation and the weather forecast for the next two weeks indicates that below-normal temperature anomalies will be with most propane retailers for the next two weeks, with a few brief periods of moderation in some areas. But the areas that received a snowpack from storms the past week will likely trend colder than usual even during the moderation periods.
