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

BOE Report

Sign up
  • Home
  • 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
    • CAOEC Rig Count
    • Baker Hughes Rig Count
    • USA Rig Count
  • Industry Data
    • Canada Oil Market Data
    • Canada NG Market Data
    • USA Market Data
    • Data Downloads
  • Jobs

Collapse in U.S. natgas prices cut widow maker spread to 20-month low

December 1, 20218:01 AM Reuters0 Comments

U.S. natural gas futures dropped to a three-month low on Wednesday along with a collapse in oil prices, cutting the 2022 March-April spread to its lowest in 20 months as gas output rose to record highs and stockpiles remain healthy for the winter.

The gas industry calls the March-April spread the “widow maker” because rapid price moves resulting from changing weather forecasts have knocked some speculators out of business, including the Amaranth hedge fund, which lost over $6 billion on gas futures in 2006.

The premium of gas futures for March over April fell to 28 cents per million British thermal units (mmBtu), the lowest since March 2020.

That is a massive narrowing of the spread, which hit a record $1.80 in early October when the markets worried about tight U.S. gas supplies during the winter because stockpiles were over 6% below normal and output was slipping.

Now, however, U.S. inventories were just 2% below normal for this time of year after mostly mild weather in October and November allowed utilities to stockpile huge amounts of gas.

Output in the U.S. Lower 48 states, meanwhile, averaged a record 96.5 billion cubic feet per day (bcfd) in November, up from 94.2 bcfd in October, according to data provider Refinitiv. That topped the prior all-time monthly high of 95.4 bcfd in November 2019.

In addition to the narrowing March-April spread, the premium of futures for November over October 2022 rose to 10 cents, their highest since April 2011.

The market uses the March-April and October-November spreads to bet on the winter heating season when demand for gas peaks.

The entire global energy complex collapsed over the past week on concerns demand will fall as coronavirus cases rise, causing a supply glut.

Oil prices fell to their lowest since August earlier on Wednesday.

Follow the BOE Report
  • Facebook
  • Twitter
  • LinkedIn

Sign up for the BOE Report Daily Digest E-mail

Successfully subscribed

Latest Headlines
  • Oil steady as weak demand outlook lingers
  • Column: Appalling new historical precedent – surplus cash flow cannot solve world’s energy problems, by design
  • One commercially proven carbon capture technology is Fluor’s Econamine FG PlusSM (EFG+).
  • Inviting International Conference on geo-resources plant technology for oil & gas
  • Barclays cuts oil price forecasts for 2022, 2023

Return to Home
Alberta Gas
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
    • Foxterra
    BOE Network
    © 2022 Grobes Media Inc.