Never This Short Before Winter: Speculators Bet Against Natural Gas
Long story short: Large speculators hold the biggest natural gas short of any autumn since the data began in 1990, close to their all-time record. Hedge funds got there mostly by selling longs. The swap dealers on the other side hold their biggest long since 2011.
In this story
Watch this storyLong Story Short, Episode 3 · from 6:04on YouTubeSource: CFTC Legacy report, futures only, weekly from January 2014 to October 20, 2026.
Large speculators are betting heavily against natural gas, and the heating season has barely begun. As of October 20, they were net short 241,272 contracts of Henry Hub gas futures. That is the largest short since February 2020.
The record is close. In June 2015, large speculators were net short 262,061 contracts, about 21,000 more than today. Each contract covers 10,000 million British thermal units of gas.
Never This Short in the Fall
The timing sets this short apart. The Legacy report for natural gas goes back to 1990. In all those years, large speculators were never this short between September and November. The three largest autumn shorts in the data are the three reports of this October.
The three largest shorts in the data came in June 2015, January 2020 and March 2011. Two of them formed during or at the end of a winter.
Large speculators have never been this short of natural gas before a winter.
Hedge Funds Sold Their Longs
The Disaggregated report shows the money managers inside that group, mostly hedge funds and commodity trading advisers. They are net short 157,409 contracts, the most since February 2024. The latest week alone added 30,928 contracts to the short.
Most of the move came from longs that were sold. In four weeks, money managers closed 63,993 long contracts and added 27,869 shorts. Their shorts are high, but they were already high in August.
Source: CFTC Disaggregated report, futures only, weekly from January 2025 to October 20, 2026.
Swap Dealers on the Other Side
Every short has a long on the other side. In natural gas, the largest long belongs to the swap dealers. These are banks that sell price swaps to utilities, producers and other companies and hedge the result in futures.
Swap dealers are net long 236,123 contracts, the most since March 2011. Their record of 255,243 contracts dates from that month. Producers and merchants, the second commercial group, are close to flat with a net short of 13,154.
How Earlier Shorts Ended
A large short is not a signal that selling will continue or stop. Positioning can stay extreme for months, and the COT Index shows how stretched a trade is, not when it ends.
The two most recent large shorts of money managers still give a sense of scale. In February 2024, they were net short 160,729 contracts. Thirteen weeks later, they were net long. In February 2020, they set their record short of 331,548. Eight weeks later, it was 88% smaller.
Both of those shorts peaked toward the end of a winter. The current one comes before winter, so the comparison only goes so far.
What to Watch Next
- The record. Large speculators are about 21,000 contracts away from the largest gas short since 1990.
- The longs. Money managers have sold a quarter of their longs in four weeks. Further selling would deepen the short without any new shorts.
- The swap dealers. Their long is 19,120 contracts below the record of March 2011.
Source: CFTC Commitments of Traders, futures only, positions as of Tuesday, October 20, 2026, NYMEX Henry Hub natural gas futures. Large speculators come from the Legacy report, money managers, swap dealers and producers from the Disaggregated report.
