Investing.com — Natural gas futures continued their move south on Wednesday. The bears continued to strangle the market even though he expects heating fuel stocks to fall by more than 100 bcf (billion cubic feet). Mainly warm winter season.
Last month’s gas contract for Henry Hub on the New York Mercantile Exchange was 21.6 cents lower, or 8%, settled at $2.468 per mmBtu, or British thermal units per million meters.
March gas prices hit a 21-month low of $2.465. The last time Henry Hub’s last month’s gas contract fell below that was on April 7, 2021, when he hit an intraday low of $2.458.
Gas futures are down more than 20% since the start of the week and have fallen more than 60% over the past two months.
The gas price meltdown came after an unusually warm start to winter 2022/23 that led to a collapse in demand for heating fuels. It hit a 14-year high and traded as high as $7 in December.
Sluggish consumption drove the US to 2.729 tcf, or trillion cubic feet, at the end of the week ending January 20, up 4% from 2.622 tcf a year earlier, according to a weekly update provided by Energy Information. management, or EIA. The agency provides inventory updates every Thursday, with analysts expecting a drawdown of 146 bcf for the week ending Jan. 27, compared to a deficit of 91 bcf the previous week.
“Gas prices have plummeted on the perception that any coming cold weather will not be enough to hit storage hard,” said John Kilduff, a partner at New York energy hedge fund Again Capital. “Dry gas production now appears to be booming as well, so we can end the winter with stocks about 2-3% higher than last year’s levels.”
Dry gas production has hovered near or above 100 bcf a day recently, analysts at Houston-based energy trading consultancy Gelber & Associates said this week.
Forecasts of impending chills were also less supportive than before, analysts at the consultancy said.
In Tuesday’s reading, major weather forecast models, including the US-based World Forecast System and the European ECMWF model, show that the looming cold snap will be limited to parts of the northern US, with the southern plains and southeastern part of