Despite prices falling to their lowest level in real terms since futures trading began in 1990, hedge funds and other professional traders have turned ultra bearish on their outlook for the US gas market, according to a report by Reuters.

The report cites position reports filed with the Commodity Futures Trading Commission as showing that hedge funds and other money managers sold the equivalent of 399bn cu ft in the two major futures and options contracts linked to prices at Henry Hub in Erath, Louisiana, over the seven days ending on 20 February.

Fund managers have now been net sellers in each of the most recent five weeks, selling 2,085 cu ft since 16 January, with combined position being reduced to a net short of 1,675 cu ft (3rd percentile for all weeks since 2010) down from a net long of 410 cu ft (42nd percentile) in the middle of January.

The gas market has seen serious oversupply in recent months, with inventories standing at 21% above the prior ten-year seasonal average as of 16 February.