Haiden Holmes
Jan 09, 2023 10:25
Even after three weeks, natural gas prices continue to decline.
For the third consecutive week, the primary heating fuel in the United States fell 17%, wiping more than half of the market's total value.
On Friday, the benchmark February natural gas futures contract on the Henry Hub of the New York Mercantile Exchange settled at $3.71 per million British thermal units (mmBtu). This is a reduction of 10 cents, or 2.6%. The market lost precisely 17.1%, or 76.50 cents, for the week.
The fall happened because market participants ignored the weekly decline in U.S. gas inventories provided by the Energy Information Administration (EIA) and instead concentrated on the projected exceptionally warm winter.
"Remarkably, prices are now sitting at a year-over-year reduction, which is an amazing swing in sentiment in such a short period of time," Gelber & Associates wrote in its daily report on natural gas.
The agency anticipated that gas prices will continue to rise if forecasts for the following weeks indicate cooler temperatures.
"In anticipation of the next gas storage data release for the week ending January 6, preliminary market projections are considerably diverse and call for a negative storage report with a storage draw between 10 and 50 billion cubic feet," Gelber noted.
"There are currently few indications that pure Arctic air will arrive during the next two weeks. Consequently, the Gas-Weighted Degree Days (GWDDs) for January 6 through January 19 are the lowest in the previous five years.
According to the research, gas was "both technically and fundamentally oversold" despite the present unusually warm weather.
"Prices are anticipated to recover after the release of solidly bullish [weather] reports,"
Until this supporting news materializes, the bears will continue to control the gas market "Gelber said.
Jan 09, 2023 10:27