NEW YORK: US natural gas futures plunged to a nine-month low on Tuesday after the lower-priced March contract became the front-month and on forecasts for milder weather and lower heating demand over the next two weeks than previously expected. Analysts also noted that US industrial demand for gas was depressed, in part because of the ongoing outage of a liquefaction unit at Freeport LNG’s export plant in Texas.
The Freeport outage leaves more gas in the country when US output is rising as wells return to service after freezing during extreme cold in mid-January.
That Arctic freeze boosted gas demand to a daily record high and cut both US gas output and feedgas to liquefied natural gas (LNG) exports plants to one-year lows.
On its first day as the front month, gas futures for March delivery on the New York Mercantile Exchange (NYMEX) rose 3.2 cents, or 1.6%, from where that contract closed on Monday to $2.086 per million British thermal units (mmBtu) at 9:26 a.m. EST (1426 GMT).
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