NEW YORK: US natural gas futures fell to their lowest level in over a week on Thursday, on near record output and predictions of milder weather over the next two weeks, as investors awaited a federal report expected to show storage withdrawals last week were near normal for this time of year.
Front-month gas futures for April delivery on the New York Mercantile Exchange were down 8.1 cents, or 2% lower at $4.00 per million British thermal units (mmBtu) as of 09:03 a.m. ET, after hitting their lowest level since March 3 earlier in the session. Prices fell over 8% in the previous session.
“It looks like we’re trying to build a base of $4 as they’re going to take a look at the inventory today… we’re seeing some of the sell off is because the cold front that we saw is starting to ease,” said Phil Flynn, an analyst at Price Futures Group. Financial firm LSEG forecast average gas demand in the Lower 48 states, including exports, will fall from 111 bcfd this week to 106 bcfd next week.
Meanwhile, LSEG said average gas output in the Lower 48 US states has risen to 105.7 billion cubic feet per day (bcfd) so far in March, up from a record 105.1 bcfd in February.
LSEG estimated there would be 205 heating degree days over the next two weeks in the Lower 48 US states, up from the 198 HDDs estimated on Wednesday. The normal level is 258 HDDs for this time of year. The US Energy Information Administration is scheduled to release its weekly storage report later in the day.
Analysts projected utilities pulled 54 billion cubic feet (bcf) of gas out of storage during the week ended March 7. That compares with declines of 19 bcf during the same week last year and a five-year average draw of 56 bcf for this time of year.
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