NEW YORK: US natural gas futures slid about 3% on Tuesday on rising output, forecasts for milder weather and lower heating demand than previously expected and a decline in the amount of gas flowing to liquefied natural gas (LNG) export plants to a one-month low.
Front-month gas futures for January delivery on the New York Mercantile Exchange fell 8.6 cents, or 2.7%, to $3.096 per million British thermal units (mmBtu) at 8:14 a.m. EST (1314 GMT).
Some analysts have said that winter, and the high prices it usually brings, could be over before the season officially starts now that the heavily traded March-April “widow maker” spread is trading in unusual contango. That means the April contract is priced higher than the March contract.
March is the last month of the winter storage withdrawal season, and April is the first month of the summer storage injection season. Because gas is primarily a winter heating fuel, summer prices typically do not trade above winter ones.
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