Natural gas bullishness drops to five-month lows due to increasing supplies in natural gas inventories. According to the commitment of traders data released by the Commodity Futures Trading Commission (CFTC), money mangers cut net-long positions by 9.1 percent in the week ending on May 13. This was the lowest level since December.
With the winter months passing, “we’re on the path to a more comfortable supply situation by the end of the summer,” said Tom Seal, senior VP of energy trading at FCStone Latin America LLC. Production from shale deposits climbed to a record of 16.1 billion cubic feet per day in the week ending on May 9, according to Credit Suisse on Thursday.
The Energy Information Administration (EIA) inventory data shows a 179 billion cubic feet increase in natural gas stores in the first two weeks of May. Goldman Sachs’ Jeffrey Currie, head of commodities research, said “we still expect supply growth in 2014 and 2015 to continue to outpace demand.”
Natural gas production is expected to grow three percent to average 72.26 billion cubic feet per day, an all-time record, according to EIA projections.