US Natural Gas Hit 22-Weeks Low

Due to lower demand caused by warmer-than-usual temperatures in the United States, US natural gas futures traded near $3.6 per million British thermal units.

It was observed that the drop in demand pushed the price to its lowest critical levels seen since July 16, 2021.

Supporting the point above, government data from the US Energy Information Administration (EIA) showed that utilities withdrew 88 bcf from storage in the second week of December, compared with market forecasts of 86 bcf but well below the five-year average of 114 bcf.

According to Trading Economics, investors expect the above-usual temperatures to allow stockpiles to reach above-normal storage levels.

However, this should create an abundance of natural gas large enough to meet future demand.

According to records from Asian and European futures, US natural gas futures surged to a twelve-year high of $6.466 on October 6th, before erasing more than 40% as any concerns about tightness in the US gas market have virtually vanished following a so-far warm winter heating season.

Even though the change in winter conditions has created a significant adjustment, analysts believe that this shouldn’t affect inventory levels for natural gas for the coming winter month.

Finally, the Trading Economics global macro models and analysts expect natural gas to trade at 3.71 USD/MMBtu.