Natural Gas Futures Could Get Boost From Rebalancing of Leading Commodity Indexes

摘要

After breaking above $4.50 early in the week, January natural gas futures plummeted late in the week - briefly dipping below $4/MMBtu on Friday - as traders focused on warmish weather forecasts for January and February. But while further weakness is a possibility, it could lead to a buying opportunity for index funds that are now beginning to rebalance their portfolios. "No matter what the weather forecasts do, the market is preparing for the influx of index dollars, which should be hitting the market anytime now and continue over the next two to three weeks," said a gas trader in New York. "Depending on the size of the volumes being transacted, it could lead to a sizeable short squeeze. Sometimes these things happen during the holidays when liquidity is thin and can produce some sizeable market moves."