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US natural gas futures settled down in thin trading, closing to the lowest in about five months as forecasts shifted warmer, indicating lower demand for the heating and power-plant fuel.
Traders were also pricing in an increasingly low probability of an unexpected cold snap draining supplies as the winter heating season draws to a close. High production levels and above-normal temperatures are expected to flip the current modest storage deficit to a surplus in the coming weeks.
“Even if we get a cold shot, we have really run out of a winter fairway for this to jump higher,” said Darrell Fletcher, managing director of commodities at Bannockburn Capital Markets.
- Futures for March delivery settled -7c, or -2.4%, to $2.915/mmbtu on Nymex
- Lowest front-month settlement since Sept. 26
- Prices for the more actively traded April contract closed -9c, or -3.1%, to $2.831/mmbtu
- March futures expire on Feb. 25
Weather:
- Forecasts shifted warmer, with above-normal temperatures expected across the western half of the US through the end of the month: Commodity Weather Group
- Midday outlooks also trended warmer: Xweather
Daily BNEF Gas Data:
- Lower-48 dry gas production on Tuesday ~113.3 bcf/day, or +8.8% y/y
- Lower-48 total gas demand on Tuesday ~101.3 bcf/day, or +14.2% y/y
- Dry gas exports to Mexico on Tuesday ~6.7 bcf/day, or -2.6% w/w
- Estimated gas flows to LNG export terminals on Tuesday ~19.8 bcf/day, or +1.0% w/w
Gas Market News:
This story was produced with the assistance of Bloomberg Automation.
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