US natural gas futures fell 5 percent on Thursday, the biggest daily decline since February, on forecasts for moderating weather later in November after a cold blast blows through the Midwest and Northeast over the next week or so. Front-month gas futures on the New York Mercantile Exchange closed down 20.8 cents at $3.977 per million British thermal units.
That was the fourth down day in a row, the longest losing streak for the contract since mid-October, and has pushed the front-month down 10 percent since the start of the week, the biggest four-day loss since March. The front-month's drop of 10 percent this week is its biggest weekly loss since February, but it is still up 3 percent for the month and down 6 percent year to date.
Despite the futures losses, next-day gas and power in New England both climbed to eight-month highs as the Arctic cold moves from the Midwest to the East. On the Intercontinental Exchange, gas at the Algonquin hub gained $2.10 to $10.09 per mmBtu, while power at the Massachusetts hub jumped almost $9 to $76.19 per megawatt hour. MDA Weather Service forecast significant cold over most of the lower 48 US states over the next 10 days before a less cold pattern starts over the following 11 to 15 days.
On the technical side, the NYMEX gas front month fell below the 14-day moving average of $4.04 for the first time since late October, and the 100-day moving average of $3.96 was close to falling below the 40-day moving average of $3.92 for the first time since April.
In early estimates, analysts said utilities likely added 39 billion cubic feet of gas into storage last week in what is expected to be the last build of the injection season. That was well below the previous week's 91-bcf build, but well above builds of 22 bcf last year and the five-year average build of 16 bcf. The US Energy Information Administration will release the storage report a day late, on Friday at 10:30 am EST (1530 GMT), due to the US federal holiday on Tuesday.
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