Natural gas prices fell 19% earlier this month after a 13-year high, reversing some of the processes that led to fears of higher heating costs and higher production costs during the previous high price.
Warm spring is behind the fall. In most parts of the country, gas is stored faster than expected due to the lack of heat, and depletion has led to winter inflation and even potential shortages.
Traders’ forecasts suggest that temperatures will remain unchanged until November. Meanwhile, federal climate scientists said on Thursday that their climate models forecast a warmer climate than average, especially in the southern and eastern summers.
“In most parts of the country, the weather is good, and the perfect weather is not good for natural gas,” said Tony Scott, vice president of energy analysis at FactSet. “We are quickly closing the gap on the fact that the oil market was short.”
The U.S. Energy Information Administration said Thursday that more than a third of normal gas was added to domestic reserves last week, the latest in a week of more than average construction. EIA data shows that investors who finished below 7.7 on August are now only 4.2% shorter.
Natural gas futures ended Thursday at $ 5,115 per million British thermal units. This is down from $ 6,312 on October 5, the highest closing price since late 2008, before Frekers flooded the market with shell gas.
Despite recent declines, prices are still higher than in previous decades. Gas has spent most of the past two winters trading for less than $ 3.
This summer, it has burned more gas to generate electricity for air conditioning than it has ever been. Low prices in Europe and Asia have pushed home prices to record, and buyers are scrambling to renew their supplies of depleted natural gas or LNG. The premium price in those markets has prompted American manufacturers to load LG export terminals as much as possible.
Analysts draw on the possibility that US supplies will be depleted in cold weather, and that price increases should return dramatically in order to return exports to the domestic market.
“We’re looking at a variety of options for $ 4 to $ 30,” said Luke Nemes, director of energy purchasing and marketing at New Jersey Transparency Energy. Gas.
In order to produce $ 30 worth of gas, there must be a long snowy climate that will force local rulers to ban LNG buyers. More likely, Mr Nems said, with winters ranging from normal to hot, with prices declining to $ 4 a year, indicating a spring break.
“Normally, I didn’t see $ 6 gas coming in December,” he said.
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