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Commitments of Producers in Natural Gas (NYMEX) Index


Last update: August 11, 2017, 15:58 EDT
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Description

CFTC COT NYMEX Producer Index is a percentile of net producer positioning measured over the last 3 years. 

This indicator converts net positions (commitments) to a 0% -100% scale. It reflects where the current net position ranks as a percentage of its range over the last three years. A reading close to 0 suggests that a top is forming and a reading close to 100 suggests that a bottom is forming. Use this indicator to watch for extremes reading in the natural gas market. Readings of 95 and higher as well as 5 and lower indicate a potential market extreme. This is when the probability of a reversal is higher and a trader may start consider taking a similar position.

Producers predominantly engage in the production, processing and handling of a physical commodity (natural gas) and use the futures markets to manage or hedge risks associated with those activities. They are the insiders. Their positioning in the market may shed light on future price movements. For example, if they are actively hedging – i.e., selling (shorting) the commodity – that means they “like” the current price and probably expect it to go down soon.

The indicator is calculated using the data for NYMEX Natural gas futures.

Updated every Friday by 6 PM Eastern time.

Source: US Commodity Futures Trading Commission, Bluegold Research calculations

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