Sign Up for FREE Daily Energy News
CDN NEWS  |   US NEWS  | TIMELY. FOCUSED. REVELANT. FREE
BREAKING NEWS:

Shocker PASS - Headwind Solutions
H2Sweet
Hazloc Heaters
Shocker PASS - Headwind Solutions
Hazloc Heaters

U.S. natgas futures down nearly 5% on warmer weather forecasts


U.S. natural gas futures fell nearly 5% on Monday on expectations of warmer weather, which would lead to a reduction in heating demand.Front-month gas futures for January delivery on the New York Mercantile Exchange were down 11.4 cents, or 4.9% to settle at $2.214 per million British thermal units (mmBtu), their bigger daily percentage fall in over three weeks.

“(As) the weather last week was colder than normal we would expect a larger-than-usual storage draw. However, somewhat normal to above normal weather for this week and the holidays would mean reduced demand significantly,” said Zhen Zhu, economist at Oklahoma City-based C.H. Guernsey.

Prices are likely to stay flat or go even lower if the weather is not much colder than normal in the next several weeks, he added.

Data provider Refinitiv estimated warmer-than-normal temperatures in the Lower 48 U.S. states over the next two weeks. It projected 385 heating degree days (HDDs) in the time period, lower than the 394 HDDs estimated on Friday, which is indicative of warming weather.

Last week had 197 HDDs versus a 30-year normal of 189 HDDs, Refinitiv data showed.

Refinitiv predicted demand in the Lower 48 states, including exports, would fall from an average of 126.9 billion cubic feet per day (bcfd) last week to 113.6 bcfd this week.

Traders noted prices have dropped 20% since hitting an eight-month high of $2.905 per mmBtu in early November due to milder-than-usual weather and expectations inventories will still rise over the five-year average in coming weeks. Near-record production enables utilities to leave more gas in storage, wiping away lingering concerns of supply shortages and price spikes during the winter.

Gas production in the Lower 48 states rose to 94.9 bcfd on Sunday from 94.8 bcfd on Saturday, according to Refinitiv.

Analysts said utilities likely pulled 131 billion cubic feet (bcf) of gas from storage during the week ended Dec. 20. That compares with a bigger-than-expected withdrawal of 107 bcf during the week of Dec. 13, a decline of 61 bcf during the week of Dec. 20 last year and a five-year (2014-18) average reduction of 101 bcf for the week of Dec. 20.

If correct, the decrease for the week ended Dec. 20 would cut stockpiles to 3.280 trillion cubic feet (tcf), 1.2% below the five-year average of 3.319 tcf for this time of year.



Share This:



More News Articles


New SHOWCASE Directory Companies

 

T.A. Cook
Gardner Denver
STEP Energy Services
Presto GeoSystems