U.S. natural gas futures slipped on Wednesday after shedding over 8% in the previous session as forecasts indicated a turn to slightly warmer weather.
Front-month gas futures was down 1% at $7.11 per million British thermal units as of 9:31 a.m. EDT (1331 GMT).
But price action was relatively stable after a sharp reversal in the previous session, following rallies to 13-year peaks in preceding days driven in part by an outlook for an unseasonal cold snap coming at a time when the market generally shifts to moving gas into storage in preparation for the next winter.
“Short-term temperature views extending out through the rest of this month and into May have been unusually volatile but with patterns apt to become more stable as the calendar begins to work against significant HDD accumulation,” advisory firm Ritterbusch and Associates said in a note, referring to heating degree days.
“We are maintaining a bullish stance as we view current levels in the $7.00-$7.25 zone as a buying opportunity expecting new highs,” the firm said.
Data provider Refinitiv estimated there would be 131 heating degree days (HDDs) over the next two weeks in the Lower 48 U.S. states, closer to the 30-year norm of 122 HDDs for this time of year.
HDDs, used to estimate demand to heat homes and businesses, measure the number of days a day’s average temperature is below 65 Fahrenheit (18 Celsius).
Meanwhile, data from Refinitiv showed average gas output in the U.S. Lower 48 states was at 94.4 billion cubic feet per day (bcfd) so far in April from 93.7 bcfd in March, down from December’s monthly record of 96.3 bcf.