US Natgas Futures Beat Sharp Retreat, Shed 10%
(Reuters) — U.S. natural gas futures fell 10% on Tuesday, in a technical correction aided by a shift to a slightly warmer weather outlook after expectations of a cold snap sent prices soaring to an over 13-year peak in the last session.
Front-month gas futures slipped 10% to $7.033 per million British thermal units as of 10:57 a.m. EDT (1457 GMT), having scaled a peak since September 2008 on Monday.
"It's mostly an issue of momentum and a correction to the huge run-up in prices over the past week... Prices that high are not supported by the market fundamentals," said John Abeln, an analyst with data provider Refinitiv,
There has been a shift in the weather over the past 12 hours, with the 2-week forecasts shifting somewhat warmer, Abeln added.
Data provider Refinitiv estimated 130 heating degree days (HDDs) over the next two weeks in the Lower 48 U.S. states, slipping from yesterday's outlook of 156 HDDs, though slightly higher than the 30-year norm of 126 HDDs for this time of year.
HDDs, used to estimate demand to heat homes and businesses, measure the number of degrees a day's average temperature is below 65 Fahrenheit (18 Celsius).
Meanwhile, data from Refinitiv showed average gas output in the U.S. Lower 48 states rose to 94.5 billion cubic feet per day (Bcf/d) so far in April from 93.7 Bcf/d in March, down from December's monthly record of 96.3 Bcf/d.
"Production levels are definitely the key focus in the near to medium term... While a production rebound is assured, the speed of that rebound is very much unknown, and the markets will really be watching that in the months to come," Abeln said.
The International Monetary Fund on Tuesday slashed its forecast for global economic growth by nearly a full percentage point, citing Russia's invasion of Ukraine, and warning that inflation was now a "clear and present danger" for many countries, triggering concerns over demand and also weighing on crude prices.
Related News
Related News
- Trump Aims to Revive 1,200-Mile Keystone XL Pipeline Despite Major Challenges
- Valero Considers All Options, Including Sale, for California Refineries Amid Regulatory Pressure
- ConocoPhillips Eyes Sale of $1 Billion Permian Assets Amid Marathon Acquisition
- ONEOK Agrees to Sell Interstate Gas Pipelines to DT Midstream for $1.2 Billion
- Energy Transfer Reaches FID on $2.7 Billion, 2.2 Bcf/d Permian Pipeline
- U.S. LNG Export Growth Faces Uncertainty as Trump’s Tariff Proposal Looms, Analysts Say
- Tullow Oil on Track to Deliver $600 Million Free Cash Flow Over Next 2 Years
- Energy Transfer Reaches FID on $2.7 Billion, 2.2 Bcf/d Permian Pipeline
- GOP Lawmakers Slam New York for Blocking $500 Million Pipeline Project
- Texas Oil Company Challenges $250 Million Insurance Collateral Demand for Pipeline, Offshore Operations
Comments