US natural gas futures fell over 4 percent on Tuesday after passing through technical stops on forecasts for mild weather and light heating demand through at least mid-November. That would leave utilities with more than enough fuel to inject into stockpiles for the next few weeks and boost the amount of gas in storage to a record high.
After falling more than 5 percent earlier in the day, front-month gas futures for December delivery on the New York Mercantile Exchange fell 12.4 cents, or 4.1 percent, to settle at $2.902 per million British thermal units.
The front-month fell below the psychological $3 per mmBtu mark and the 50-day moving average on Tuesday, analysts noted. In addition, the December contract fell to its lowest level since May.
"The market has given up on winter even though winter hasn't started," Kent Bayazitoglu, director of market analytics at energy consulting firm Gelber & Associates in Houston, said in a report. "Today's strong decline is offering up some buying opportunities."
The premium of January 2017 futures over December 2016 rose to its highest level since June 2011, while the premium of December 2017 over December 2016 climbed to its highest since January 2012.
In addition, the premium of March 2017 futures over April, the so-called widow-maker spread, fell to its lowest on record, according to Thomson Reuters data going back to 2008. Analysts noted the market uses March as an indicator for winter.
Comments
Comments are closed.