Welcome to the bears in control edition of Natural Gas Daily!
Natural gas prices got absolutely slammed today. The drop in natural gas surprised even the traders themselves. Traders came into this report short -25% in positioning, but following the dramatic drop, traders started to cover short positions reducing positioning to -10% going into the weekend.
The drop also took us by surprise with January contracts now ~14 cents below its fair value. That's quite a discount.
Even though we had very low fundamental estimated, prices are now undervalued by ~3.82% according to our model.