Natural Gas Gets Bullish Bump From Hedge Funds

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Feb. 21 (Bloomberg) -- Bloomberg's Scarlet Fu and Bloomberg Tradebook’s Greg Bender put natural gas futures in focus in "On The Markets" on Bloomberg Television's "In The Loop."


It's a combination of the cold weather forecast them a colder than normal winter, even with the warm weather this past week?

Yes, we have an updated forecast and they're looking at colder weather this week.

There is the drawing inventories that don't seem to be getting replenished.

Another thing to remember is that the cold weather forecasts are volatile.

We had just make an intraday high and reversed down 56 -- $.50. traders are definitely trading on a much shorter timeframe.

All this volatility, is this on the back of more or less volume?

More volume and not just in futures but also in the derivatives.

The natural gas etf is seeing more volume and options on that etf in the futures itself are also seeing a lot of volume.

It's not necessarily a risk fleet play but a lower risk play.

You mentioned traders are using shorter time frames but we are on the cusp of spring.

We need to look ahead to the summer where there is lots of disruptive weather.

What are people and traders saying about the possibility of summer hurricanes and that disrupting inventory?

If you look at the open interest in the futures contract, march is coming off the board wednesday, most of the role has occurred in the april contract and beyond that, the next outlier is sober which is in the middle of hurricane season.

Traders are not only trading the march-april spread and the april out right futures but they are also trading the april-october spread which is the spot relative to the hurricane feature.

We have march futures expiring on wednesday.

What do you expect to happen on thursday?

I think traders are looking at either a lower risk entry point to join these bullish trends.

We saw that two weeks ago where we went down to $4.50 which was the old resistance.

I don't expect to see much buying at these levels.

We are at five-year highs.

On the support level, i think we will see maybe about four dollars 75 in the april contract which is a high from a couple of weeks ago.

You don't think we will get back to $4.50? it is hard to say.

The trend is definitely will is right now.

There are traders looking to fade this move and trade the spread.

Thank you so much.

"on the markets we are"on the markets" once again in 30 minutes and "market makers" is next.

This text has been automatically generated. It may not be 100% accurate.


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