NEW YORK: US natural gas futures fell about 4 percent on Thursday to a two-week low on forecasts for milder weather and lower demand next week than previously expected, near-record output, ample amounts of gas in storage and a reduction in gas prices around the world.
Front-month gas futures for January delivery on the New York Mercantile Exchange fell 16.3 cents, or 3.6 percent, to $4.432 per million British thermal units (mmBtu).
That price decline preceded the release of a federal report on Thursday that is expected to show last week’s storage withdrawal was much bigger than usual for this time of year as consumers burned more gas than normal to keep their homes and businesses warm during extreme cold.
Analysts forecast energy firms pulled 166 billion cubic feet (bcf) of gas out of storage during the week ended December 5. That figure compares with a decline of 167 bcf during the same week last year and an average withdrawal of 89 bcf over the past five years (2020-2024).
Looking forward, the market is showing signs that traders are not worried about having enough gas supplies in storage for the winter. The premium of futures for March over April 2026
The industry calls the March-April spread the “widow-maker” because rapid price moves resulting from changing weather forecasts have forced some speculators out of business, including the Amaranth hedge fund, which lost more than $6 billion in 2006.
Traders use the March-April and October-November spreads to bet on winter weather forecasts and supply and demand. March is the last month of the winter heating season when utilities pull gas out of storage, and October is the last month of the summer cooling season when utilities inject gas into storage.
Financial firm LSEG said average gas output in the Lower 48 states has risen to 109.7 billion cubic feet per day (bcfd) so far in December, up from a monthly record high of 109.6 bcfd in November.
Record output has allowed energy companies to stockpile more gas than usual, leaving the amount of fuel in storage at about 3 percent above normal for this time of year.
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