Natural gas has been one of the most heavily “shorted” commodities over the last twelve months. This “short” position has been reduced somewhat during the recent market turmoil as market volatility spiked and the “long crude/short natural gas” trade was unwound, strategists at Rabobank brief.
Key quotes
“We continue to see meaningful upside to natural gas prices in the back half of this year and our conviction has increased in that call given the sharp drop in oil prices and the subsequent slowdown in oil drilling in the Permian Basin.”
“Essentially what has been a very ‘bearish’ period for oil prices has had an unintended ‘bullish’ impact on our natural gas outlook.”
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