Traders bet against US natural gas as El Niño promises mild winter

US natural gas: US natural gas is a major heating and power-generation fuel traded through physical markets and futures contracts, with demand strongly influenced by weather. In this news, traders are building bearish positions because a strong El Niño is expected to produce milder winter conditions and reduce heating demand, while Arctic cold could quickly reverse that outlook. Market risk: Analysts describe the mild-winter scenario as largely reflected in natural-gas positioning, leaving the market vulnerable to a sharp rally if Arctic air produces unexpectedly severe cold. Supply backdrop: The US Energy Information Administration expects lower household heating expenditures this winter, citing lower fuel costs alongside the broader market expectation of relatively ample natural-gas supply. Weather outlook: Recent NOAA outlooks indicate a very strong El Niño is highly likely during the 2026–27 winter, supporting expectations for warmer conditions across important US heating markets.