NEW YORK: US natural gas futures dropped almost 10% to an eight-week low on Thursday on forecasts for milder weather in mid-December than previously expected and a smaller-than-expected storage draw last week. The price plunge came despite record liquefied natural gas (LNG) exports.
The US Energy Information Administration (EIA) said US utilities pulled just 1 billion cubic feet (bcf) of gas from storage during the warmer-than-normal week ended Nov. 27. That was less than the 12-bcf decline analysts forecast in a Reuters poll and compares with a decrease of 22 bcf during the same week last year and a five-year (2015-19) average withdrawal of 41 bcf.
"Today's warm shift in weather forecasts and an exceedingly bearish, marginal storage withdrawal may be the final nail in the coffin for the 2020-21 winter trade," said Daniel Myers, market analyst at Gelber & Associates in Houston.
Front-month gas futures for January delivery fell 27.3 cents, or 9.8%, to settle at $2.507 per million British thermal units, their lowest close since Oct. 2 and their biggest daily percentage drop since November 16.
That price collapse put futures for February over January for the first time since the contracts started trading in 2009. Refinitiv said output in the Lower 48 US states averaged 91.0 billion cubic feet per day (bcfd) so far in December, flat with November's seven-month high but well below the all-time monthly high of 95.4 bcfd in November 2019.
Comments
Comments are closed for this article.