• Sign up for the Daily Digest E-mail
  • Facebook
  • Twitter
  • LinkedIn

BOE Report

Sign up
  • Home
  • BOE Intel
  • Headlines
    • Latest Headlines
    • Featured Companies
    • Columns
    • Discussions
  • Well Activity
    • Well Licences
    • Well Activity Map
  • Property Listings
  • Land Sales
  • M&A Activity
    • M&A Database
    • AER Transfers
  • Markets
  • Rig Counts/Data
    • CAOEC Rig Count
    • Baker Hughes Rig Count
    • USA Rig Count
    • Data
      • Canada Oil Market Data
      • Canada NG Market Data
      • USA Market Data
      • Data Downloads
  • Jobs

U.S. natgas futures drop over 10% on warmer weather forecasts

December 28, 20208:45 AM Reuters0 Comments

U.S. natural gas futures plunged more than 10% to a three-month low on Monday, weighed down by forecasts for warmer-than-usual weather in early January that could result in lower heating demand.

One day ahead of the expiry date, Front-month gas futures declined 24.1 cents, or 9.6%, to $2.267 per million British thermal units by 10:33 a.m. EST (1533 GMT). Prices earlier dropped to their lowest since Sept. 25 at $2.238.

“Technically gas prices declined sharply after Christmas due to profit taking, and it’s fundamentally driven by the short-term warmer-than-normal weather forecasts. Our storage models project some significantly lower gas drawdowns to be reported for the next several weeks if the weather forecast is to be realized,” said Zhen Zhu, economist at Oklahoma City-based C.H. Guernsey.

Data provider Refinitiv estimated 387 heating degree days (HDDs) over the next two weeks in the Lower 48 U.S. states, below the 30-year average of 460. HDDs measure the number of degrees a day’s average temperature is below 65 degrees Fahrenheit (18 degrees Celsius). The measure is used to estimate demand to heat homes and businesses.

With warmer weather coming, Refinitiv projected average demand, including exports, would slip from 123.9 billion cubic feet per day this week to 120.4 bcfd next week.

The amount of gas flowing to U.S. LNG export plants, meanwhile, has averaged 10.7 bcfd so far in December, which would top November’s 9.8 bcfd record as a supply crunch Europe and Asia in recent months have prompted global buyers to purchase more U.S. gas.

“Any strong bullish arguments for the market have been thwarted with a further extension of normal/mild temperature views through the first third of January,” advisory firm Ritterbusch and Associates said in a note.

“The fact that nearby values are collapsing to the lowest level since the beginning of October despite an ongoing sharp contraction in the supply surplus attests to the mounting importance of the short term 1-2 week temperature views with the market now entering the heart of the heavy usage cycle.”

Output in the Lower 48 U.S. states has averaged 91.1 billion bcfd so far in December. That matches with a seven-month high of 91.1 bcfd in November 2020 and an all-time monthly high of 95.4 bcfd in November 2019.

LNG

Follow BOE Report
  • Facebook
  • Twitter
  • LinkedIn

Sign up for the BOE Report Daily Digest E-mail

Successfully subscribed

Latest Headlines
  • Canada Energy Partners announces termination of acquisition in Texas
  • Traders, funds bullish on oil price despite banking woes
  • US natgas slips to 1-month low on ample storage as weather moderates
  • Oil rises for second day as banking fears ease for now
  • Column: Who is brave enough to enter the oil patch these days? A salute to the few, courageous and needed

Return to Home
Alberta GasMonthly Avg.
CAD/GJ
Market Data by TradingView

    Report Error







    Note: The page you are currently on will be sent with your report. If this report is about a different page, please specify.

    About
    • About BOEReport.com
    • In the News
    • Terms of Use
    • Privacy Policy
    • Editorial Policy
    Resources
    • App
    • Widgets
    • Notifications
    • Daily Digest E-mail
    Get In Touch
    • Advertise
    • Post a Job
    • Contribute
    • Contact
    • Report Error
    Featured In
    • CamTrader
    • Rigger Talk
    Data Partner
    BOE Network
    © 2023 Stack Technologies Ltd.