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Natural gas prices plunged on forecasts for average or above-average temperatures across most U.S. population centers by mid-January. The drop followed a 40% rally over the prior two months fueled by hedge fund buying.
Warmer forecasts cut heating demand, and unwinding speculative longs adds downward pressure in the near term.
daily.energybulletin.orgTom WhippleJan 5, 2017After 104 past bearish weather events, Natural Gas moved a median -7.8% over 5 sessions (22% higher; middle half -14.8% to -0.8%), and -3.3% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
Explains the plunge as a weather-driven reversal of a hedge-fund-fueled 40% rally (positioning and sentiment), though it was published after the move date.
