NEW YORK: US natural gas futures slid about 2% on Wednesday on forecasts for milder weather and less heating demand next week than previously expected and ample amounts of gas in storage.
The low amounts of gas flowing to liquefied natural gas (LNG) export plants due to ongoing work at Freeport LNG’s export plant in Texas also weighed on prices.
On its first day as the front-month, gas futures for May delivery on the New York Mercantile Exchange were down 3.1 cents, or 1.7%, to $1.757 per million British thermal units (mmBtu) at 8:51 a.m. EDT (1251 GMT).
Even though that price was down from where the May contract closed on Tuesday, it was up about 11% from where the April contract closed when it was still the front-month. April closed at its lowest price since June 2020 on Tuesday.
On March 26, intraday gas prices fell to $1.481 per mmBtu, their lowest since June 2020 after a mild winter with record output allowed utilities to leave significantly more gas in storage than usual for this time of year. Analysts estimated current gas stockpiles were around 41% above normal levels.
Those low prices should boost US gas use to a record high in 2024, but cut production for the first time since 2020 when the COVID-19 pandemic destroyed demand for the fuel, according to the US Energy Information Administration’s latest outlook.
Comments
Comments are closed for this article.