According to Jin10, this winter is expected to be the warmest on record in the United States, sharply reducing natural gas demand and consumers' use of gas for heating and power generation. The strengthening El Niño is driving the most pessimistic expectations among traders in the U.S. natural gas market since the COVID-19 pandemic. U.S. gas producers and traders holding bullish positions were already hurt by El Niño in October.

Matt Rogers, president of Commodity Weather Group, said October was the third-warmest October on record since 1950 based on gas-weighted heating degree days. He said the trend is expected to intensify this month, with November likely to become the warmest on record by a clear margin. The core winter period from December through February and the natural gas market's full winter heating season from November through March are also expected to be the warmest on record.

According to the latest weekly data released by the U.S. Commodity Futures Trading Commission, fund managers have built record-high short positions in natural gas futures in anticipation of an unusually warm winter. Their net short position has also risen to its highest level since February 2020, reflecting extremely pessimistic overall market sentiment.