US natural gas futures on Tuesday slipped to their lowest since November on forecasts for moderating weather and light heating demand over the next two weeks and the rest of the winter. Front-month gas futures for March delivery on the New York Mercantile Exchange fell 3.9 cents or 1.3 percent, to settle at $2.905 per million British thermal units, their lowest close since November 18.
That puts the front-month into technically oversold territory for the first time since early January and down about 27 percent from a recent high of $3.994 on December 28, making gas a cheaper fuel than coal for more power generators. So far, the November-through-March period is on track to be slightly colder than last year's record-warm winter but milder than the 10- and 30-year averages.
Heating degree days have totalled 2,264 so far this season, versus 2,254 during the same period last winter, a 30-year average of 2,564 and a 10-year average of 2,503, according to Thomson Reuters data. US gas demand will slide to 91.1 billion cubic feet per day this week and 83.2 bcfd next week from 96.9 bcfd this week as temperatures moderate, Thomson Reuters projected.
Analysts said utilities probably pulled 119 billion cubic feet of gas from storage during the week ended February 10, the least since 2015. That compares with withdrawals of 136 bcf a year earlier and the five-year average of 156 bcf for that week. Gas stockpiles are about 2 percent above the five-year average and will probably remain so for the next several weeks if warm winter forecasts prove correct.
Longer term, however, analysts projected inventories would decline faster than usual this year as rising exports and falling production offset weaker power demand. US production averaged 70.3 bcfd over the past 30 days, compared with 73.8 bcfd a year earlier and 73.1 bcfd for the same period in 2015, according to Reuters data.
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