• 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 price collapse cut 2023 widow maker premium to record low

January 3, 20238:49 AM Reuters0 Comments

Natural gas specialized flow meters on brick wall.

U.S. natural gas futures dropped to a 10-month low on Tuesday, cutting the March-April spread to a record low as forecasts for mild weather and low heating demand in January force some in the market to give up on hopes for extreme cold in coming weeks.

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 futures for March over April fell 52% to a record low of 10 cents per million British thermal units (mmBtu) on Tuesday, according to data provider Refinitiv.

That was a massive narrowing of the spread, which hit a record $2.13 per mmBtu in May 2022 as demand for U.S. liquefied natural gas (LNG) exports soared after Russia cut most gas exports to Europe after the European Union sanctioned Moscow for the war in Ukraine.

The market uses the March-April spread to bet on the winter heating season when demand for gas peaks.

March is the last month of the winter season, while April is the first month of the summer season when utilities inject gas into storage for use during the winter.

The price spread between the March and April contracts is usually the widest of any monthly futures. A narrowing of the spread usually means the market has given up on expectations for a cold winter, while a widening of the spread usually means the market expects a cold winter.

In addition to the narrowing March-April spread, the premium of futures for February over March 2023 fell 27% to 27 cents per mmBtu, its lowest since January 2022.

LNG

Follow BOE Report
  • Facebook
  • Twitter
  • LinkedIn

Sign up for the BOE Report Daily Digest E-mail

Successfully subscribed

Latest Headlines
  • Canada’s weekly rig count at 246
  • Russian revenues to be hit further by caps on its oil products
  • The HWN Energy acquisition spree continues – set to acquire 642 wells, 145 facilities, 168 pipelines from Whitecap Resources
  • U.S. oil & gas rig count falls by the most in a week since June 2020
  • Canada regulator licences Equinor’s significant oil discovery offshore

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
    BOE Network
    © 2023 Stack Technologies Ltd.