US natural gas futures hold at 24-year low

US natural gas futures held near a 24-year low on Monday as forecasts for milder weather and less demand next week offset a projected increase in flows to liquefied natural gas (LNG) export terminals and a cooler outlook this week.
"The market is suspended in a state of uncertainty today which explains the sideways price action," Daniel Myers, market analyst at Gelber & Associates in Houston, said in a report, noting "Demand impacts from the current slowdown in economic activity (due to the coronavirus) remain unclear and are somewhat obscured by the start of mild, shoulder-season weather."
Traders said warmer weather next week should allow utilities to inject gas into storage for the first time this year.
Front-month gas futures for April delivery on the New York Mercantile Exchange fell 0.2 cents, or 0.1%, to settle at $1.602 per million British thermal units, their lowest since September 1995 for a second day in a row. On Friday, the contract tied the 24-year low hit earlier in the week. The all-time low for gas futures is $1.04 in January 1992.
Looking ahead, futures for the balance of the year and calendar 2021 were trading higher on expectations low energy prices should start to boost energy demand later this year.
Even before the coronavirus started to spread, gas prices were already trading near their lowest in years as record production and months of mild weather enabled utilities to leave more gas in storage, making fuel shortages and price spikes unlikely this winter.
Now with the coming of milder spring-like weather, data provider Refinitiv projected gas demand in the US Lower 48 states, including exports, would slide from an average of 105.4 billion cubic feet per day (bcfd) this week to 100.1 bcfd next week. That compares with Refinitiv's forecast on Friday of 104.7 bcfd this week and 103.4 bcfd next week.
The amount of gas expected to flow to US LNG export plants was on track to hold at 9.4 bcfd for a third day in a row on Monday. That compares with an average of 8.1 bcfd last week when fog delayed tanker traffic into Cheniere Energy Inc's Sabine Pass LNG export terminals and an all-time daily high of 9.5 bcfd on January 31.