2023-03-27 17:30:41 ET
U.S. natural gas futures sank nearly 6% Monday to a four-week low, as new forecasts for milder weather and lower heating demand next week should allow utilities to start injecting gas into storage .
Front-month Nymex natural gas ( NG1:COM ) for April delivery closed -5.8% to $2.088/MMBtu, its lowest settlement since February 21, when it hit a 29-month low of $2.073, and down 53% so far this year.
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The natural gas market has been volatile this month, with the contract up or down more than 5% on nine of 19 trading days.
Meteorologists expect weather in the Lower 48 states will remain mostly near normal through April 11; with warmer spring-like weather, Refinitiv forecast U.S. gas demand including exports will drop to 102.5B cf/day next week from 109.4B cf/day this week, according to Reuters.
Utilities have left more gas in storage due to this year's mild winter weather, which also should allow them to start injecting fuel into inventories at the beginning of April.
Gas stockpiles were 23% above their five-year 2018-22 average during the week ended March 17 and were expected to end ~20% above normal during the colder-than-usual week ended March 24.
Analysts at energy consultant Ritterbusch and Associates said this week that they "still see significant price support further down the curve with Europe likely to be a strong player later in the summer ."
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U.S. natural gas drops to lowest since February with onset of warmer weather