The drop largely reversed Wednesday’s meteoric 18% increase to $4.837/mmBtu—the biggest one-day rally in 14 years and the highest closing price since 2014. The sharp moves caught many in the market off guard. Cold weather forecasts and low stockpiles drove prices higher on Wednesday, then was exacerbated by a short squeeze as bearish traders were forced to close positions, market participants said. Prices then retreated on Thursday as some bet that the surge was overdone. “It certainly had the feel of a market where people were getting blown out, and reaching their pain tolerance on short positions,” said Michael Hiley, head of energy trading at LPS Futures. “The past couple days felt like the perfect storm of fundamentals and position management. It’s been years since we’ve had a move like this.” Some market participants said Wednesday’s rally looked like it was driven by one large player that got stopped […]