U.S. natural gas prices hold near 7-wk low on record output, ample storage
U.S. natural gas futures held near a 7-wk low on Tuesday on record output that should enable utilities to keep injecting gas into storage for longer than usual through late November.
Utilities usually start pulling gas out of storage to meet heating demand in mid-November. U.S. gas stockpiles were expected to rise from 6% above normal during the week ended Nov. 10 to 7% in the week ended Nov. 17, according to analysts' estimates. The lack of price movement seen so far on Tuesday came despite forecasts for colder weather and higher heating demand over the next two weeks than previously expected, and as record amounts of gas flows to liquefied natural gas (LNG) export plants.
With production at record highs and ample amounts of gas in storage, the futures market is sending signals that some traders have already given up hope of seeing price spikes this winter (November–March). In fact, prices this winter likely already peaked in early November. Those bearish price signals include a drop in the premium of futures for January over December to its lowest since November 2022, while the premium of March 2024 futures over April 2024 fell to a record low for a fourth day in a row. The premium of futures for 2025 over 2024, meanwhile, rose to $0.80/MMBtu, a fourth record high in a row. Analysts expect prices to rise in 2025 as gas demand increases once several new LNG export plants enter service in the U.S., Canada and Mexico.
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