Liquid Natural Gas (LNG) Storage at LNG Terminal, LNG Croatia LLC operated by Krk, Croatia, Monday, January 25, 2021.
Petar Santini | Bloomberg | Getty Images
U.S. natural gas futures fell more than 10% on Monday, falling to a record low in August with warmer winter temperatures than expected. The lower leg is building on more than 24 percent of last week’s losses, the worst week of natural gas since February 2014.
The January delivery deal traded up $ 3.68 for $ 1 million on Wall Street, down 10.9 percent.
Again, capitalist John Kilduff said everything depends on weather forecasts.
“We continue to have relative warmth every week. That prevents any significant heat demand,” he said. “Storage conditions have eased, and, over the past several weeks, natural gas production has returned to normal, overcoming a five-year average deficit until the beginning of the harvest.”
Natural gas prices have risen year-on-year due to stockpiles, and fears of a shortage in Europe have pushed up U.S. prices. US oil reached a seven-year high in October. Those power plants have called for the conversion of oil into natural gas.
Finally, natural gas hit the Mmbit at $ 6.466 over a seven-year period on October 6. But then the decline was rapid, and last week’s decline from Monday to Thursday was the worst four-day run in a quarter of a century, from Bespoke to data. The loss came after a 15.8% decline in November, the worst month of the year.
“It is not surprising that the 10% drop is not really the beginning of the peak season,” said Campbell Falcner, senior vice president of OTC Global Holdings. “Until the weather forecasts (and the weather) begin to turn cold, the natural gas collection will face very heavy pressures.”
For the year, the best year since 2016, natural gas is still up 47%.
According to Morgan Stanley, the concerns are “negative talk” that could lead to next year, with some positive drivers, including additional LNG projects that support demand growth, as well as resources that will turn the coal market’s momentum into gas.
The company’s 2022 basis case forecast stands at $ 3.75 per mile.