US natural gas futures fall to lowest level since April on warmer forecasts
Contracts covering all of calendar 2027 had already fallen to an almost five-year low of $3.08 per mmBtu by Friday.
Published
US natural gas futures fell to their lowest level since April on Monday, as forecasts turned warmer across the eastern two-thirds of the country through November 9. Expectations for heating and power-generation demand fell with the forecasts.
The November contract had dropped as much as 5.4 per cent on Monday. Natural Gas Intelligence (NGI) reported that the front-month contract fell to a six-month low before recovering much of its early loss, and that most winter contracts still finished lower.
US natural gas futures ended Friday at their lowest close since August on milder weather forecasts. Bloomberg reported that hedge funds built the largest short position, a bet on falling prices, in data going back to 2013 last week.
Some support came from supply and demand data. NGI forecast that the weekly storage report for the week ended October 23 would show an addition of 68 billion cubic feet, 9 billion cubic feet less than the week before, which NGI described as a below-average build. NGI also said strong demand from plants that export liquefied natural gas and declining Canadian imports offered some support to prices on Monday.
The drop to multi-month lows points to sensitivity to short-term weather rather than to changes in supply or demand. A milder stretch into early November delays the seasonal rise in heating demand that traders usually price in ahead of winter, which pushes expectations for sustained withdrawals from storage further out. If forecasts keep trending warmer, prices may need colder revisions or stronger demand from power plants to stop the slide. Little else currently supports a near-term floor in prices.
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