Natural gas prices are collapsing
2023.01.05 13:46
Natural gas prices are collapsing
Budrigannews.com – For the second time in just over a week, gas futures on the Henry Hub of the New York Mercantile Exchange fell 11% on Thursday as market participants focused on the forecast for more unseasonably warm temperatures this winter rather than the draw in the weekly gas inventory report from the United States government.
It was a new capitulation for the market, which had lost nearly a quarter of its value over five days and only gained 5% on Wednesday.
According to Gelber & Associates, a Houston-based energy trading consultancy, “Natural gas bears who’ve been dominating the market simply used yesterday’s bounce in prices as an opportunity to begin selling once again at a higher price level.” The near-term weather forecast models show exceptionally mild temperatures across the United States through at least January 12. This raises the possibility of additional downside price activity.”
The crucial $4 support level that gas bulls have been attempting to hold onto since the beginning of this week was once again below the front-month contract of Henry Hub. February gas was down 48.1 cents, or 11.5%, on the day at $3.691 per mmBtu, or metric million British thermal units, by 13:15 ET. Since the beginning of January, Henry Hub’s benchmark contract has lost almost 18%, extending the 35% decline that occurred in December.
Natural gas prices have fallen amid one of the warmest winter starts in the Northern Hemisphere.
From Switzerland to Poland, Hungary, France, and Germany, hundreds of locations in Europe have experienced record-high temperatures for this time of year.
According to forecasters, unseasonably warm weather is anticipated to persist in the United States into the following week and possibly into February.
According to the Energy Information Administration of the United States, utilities in the nation drew down an enormous 221 billion cubic feet from the previous week. This was in addition to the drawdown of 213B from the previous week, which marked the final phase of cold temperatures before the current warmth set in.
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