Natural gas fell to its lowest price since mid-2020, as warmer U.S. weather and abundant fuel supplies pushed prices lower for a sixth straight session on Tuesday.
“It's a double whammy of really strong supplies while leaving the bleak mid-winter peak in the rearview mirror,” Matt Smith, chief oil analyst, Americas, at Kpler told MarketWatch.
March natural gas futures contract NGH24,
The price of gold fell 8 cents, or 4.5%, to settle at $1.69 per million British thermal units on the New York Mercantile Exchange, the lowest closing level since July 22, 2020, according to Dow Jones Market Data.
Prices fell for the sixth session in a row – the longest daily losing streak since the eight-day session that ended on October 20, 2023.
“With winter-related risks receding more quickly than a snowman in a heatwave, prices have seen a significant decline, especially for short-term contracts,” Brian Swan, senior commodities analyst at Schneider Electric, said in a daily note. Natural gas futures during the May contract traded at less than $2.
““With the risks associated with winter receding more quickly than a snowman recedes in a heatwave, prices have fallen significantly…”“
“During this time of year, weather forecasts tend to exert a greater influence on the market than Wall Street,” Swan said, with most seven- to 10-day models predicting warmer than normal conditions for much of the country.
He added that this likely “means we will see smaller drawdowns of inventory, leading to a surplus above the five-year average that is starting to look very large.”
Last week, the EIA announced a net withdrawal of 75 Bcf, which was “fully in line with market expectations but well below the five-year average for this time of year,” Swan said.
That contributed to the surplus swelling the five-year average to just over 10% — “nearly double what it was the week before after cold weather in January threatened to bring inventories into line with seasonal norms,” he said.
The Energy Information Administration will issue its weekly update on stored natural gas supplies Thursday morning.
