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Thursday, August 11, 2022

Natural Gas Futures Slide To 21-Month Low As Winter Winds Down

Natural Gas Futures Slide To 21-Month Low As Winter Winds Down© Reuters. U.S. natural gas futures fall to 21-month low

Investing.com – Natural gas futures started the week off in negative territory on Monday, falling to its lowest level in almost two years amid speculation the end of the winter heating season will bring warmer temperatures throughout the U.S. and cut into demand for the fuel.

Front-month slumped 3.0 cents, or around 1.2%, to $2.554 per million British thermal units (btu) by 9:05AM ET (1405GMT). It fell to its lowest since May 2016 at $2.538 earlier in the session.

The commodity plunged about 9.2% last week, after weather forecasts showed that temperatures won’t be as cold as previously expected.

Market experts warned that futures are likely to remain vulnerable in the near-term as the coldest part of the winter has effectively passed and below-normal temperatures in April mean less than they do in January and February.

Spring usually sees the weakest demand for natural gas in the U.S, as the absence of extreme temperatures curbs demand for heating and air conditioning.

The heating season from November through March is the peak demand period for U.S. gas consumption.

Meanwhile, market participants looked ahead to this week’s storage data due on Thursday, which is expected to show a draw in a range between 173 and 187 billion cubic feet (bcf) in the week ended Feb. 9.

That compares with a decline of 119 bcf in the preceding week, a fall of 114 bcf a year earlier and a five-year average drop of 154 bcf.

Total natural gas in storage currently stands at 2.078 trillion cubic feet (tcf), according to the U.S. Energy Information Administration.

That figure is 503 bcf, or around 19.4%, lower than levels at this time a year ago and 393 bcf, or roughly 15.9%, below the five-year average for this time of year.

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Source: Investing.com

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