Natural gas has fallen in price by almost 20% in a week
2023.01.06 16:07
Natural gas has fallen in price by almost 20% in a week
Budrigannews.com – The most widely used heating fuel in the United States experienced a week-over-week decline of 17%, erasing more than 50% of the market’s value for the third consecutive week.
On Friday, the benchmark contract for gas futures on the Henry Hub of the New York Mercantile Exchange closed at $3.71 per mmBtu, or metric million British thermal units. This represented a decrease of 10 cents, or 2.6%. The market lost 76.50 cents, or 17.1 percent, for the week.
The decline occurred as market participants focused on additional unseasonal warmth anticipated for this winter rather than the Energy Information Administration’s (EIA) weekly drawdown in U.S. gas inventories.
In its daily note on natural gas, Houston-based energy trading consultancy Gelber & Associates stated, “Remarkably, prices are now sitting at a year-over-year decline, which is an impressive change in sentiment in such a condensed period, given that NYMEX front-month futures were up over 50% just one month ago and up over 100% in the early fall.”
According to the consultancy, going forward, gas prices would only rise if weather forecasts predicted colder temperatures in the coming weeks.
Gelber stated, “Looking ahead to the next gas storage data report for the week ending January 6, preliminary’market’ estimates are hugely varied and are calling for a bearish storage report featuring a storage draw ranging from as little as 10 billion cubic feet to as much as 50 bcf.” The storage draw can range from as little as 10 billion cubic feet to as much as 50 bcf.
“At this time, there is little solid evidence that true Arctic air will enter the picture for at least the next few weeks. As a result, the number of Gas-Weighted Degree Days (GWDDs) from January 6 to 19 is the lowest in five years.
It stated that gas was both “technically and fundamentally oversold” despite the current unusually warm weather.
“As soon as solidly bullish [weather] news emerges, prices are prone to rebound. Gelber added, “Gas market bears are firmly planted in the driver’s seat until that supportive news materializes.”
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