NEW YORK: US natural gas futures fell about 4% to a one-week low on Tuesday even as extreme cold across much of the country boosted spot gas and power prices to multi-year highs in several regions and with gas heating demand expected to reach a record high.
Futures prices declined because freezing weather over the long US Martin Luther King Jr. holiday weekend did not do much to reduce gas output and the latest weather forecasts continued to call for less cold and lower heating demand next week.
Front-month gas futures for February delivery on the New York Mercantile Exchange fell 14.3 cents, or 3.6%, to $3.805 per million British thermal units (mmBtu) at 9:18 a.m. EST (1418 GMT), putting the contract on track for its lowest close since Jan. 9.
Even though gas futures eased about 1% last week, speculators boosted their net long futures and options positions on the New York Mercantile and Intercontinental Exchanges for a sixth week in a row to the highest level since September 2021, according to the US Commodity Futures Trading Commission’s Commit-ments of Traders report.
Analysts projected energy firms would pull over 200 billion cubic feet (bcf) of gas out of storage for a second and third week in a row during the weeks ending Jan. 17 and Jan. 24 to meet soaring heating demand, erasing the small surplus of gas in inventory over the five-year average for the first time since January 2022.
Some analysts said storage withdrawals in January could top the current monthly record high of 994 bcf set in January 2022, according to federal energy data.
In the spot market gas, prices rose to their highest since January 2024 at several hubs across the country including the US Henry Hub benchmark in Louisiana, Waha in West Texas, Eastern Gas South in Pennsylvania, the Southern California Border, PG&E in Northern California and Chicago.
Comments
Comments are closed.