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Natural-gas futures drop to their lowest levels since 2016
By
Myra P. Saefong
Published: Jan 17, 2020 1:37 p.m. ET
https://www.marketwatch.com/story/n...evels-since-2016-2020-01-17?mod=mw_latestnews
AFP/Getty Images
Natural-gas futures traded as low as $2.002 per million Btus on Friday
Natural-gas futures dropped on Friday, with ample U.S. supplies and forecasts for milder weather conditions sending prices to their lowest levels since May 2016.
“The losses come down to a lack of winter, notwithstanding the chill in the consuming regions presently,” said Marshall Steeves, energy markets analyst at IHS Markit.
In Friday dealings, the front-month February natural-gas futures contract
NGG20, -3.32% fell 7.2 cents, or 3.5%, to $2.005 per million British thermal units, poised for lowest settlement since late May 2016, according to Dow Jones Market Data.
“Withdrawals from storage have trended below average and we are now at the midpoint of the winter season in terms of heating degree days,” Steeves told MarketWatch.
Data from the
Energy Information Administration released Thursday revealed a decline of 109 billion cubic feet in U.S. natural-gas supplies for the week ended Jan. 10.
That was bigger than the average 92 billion-cubic-foot decline expected by analysts polled by S&P Global Platts. However, working gas in storage at 3.039 trillion cubic feet were 494 billion cubic feet above the year-ago level, as well as 149 billion cubic feet above the five-year average, according to the EIA data. [Working gas is the
“Production has continued to rise, though at a slower pace than last year, but there is no risk of running low on supply,” said Steeves.
Weather forecasts also “suggest the current cold front won’t persist, so we may just get a week or two of above-average [supply] withdrawals as a result,” he said.
A
map from the National Weather Service shows high probability for above normal temperatures in many parts of the U.S. over the next six to 10 days, even as it forecasts hazardous travel conditions from the Plants into the Northeastern U.S. through the weekend due to a winter storm.
“Unless we begin to see significantly colder temperatures show up in the extended forecasts into the back half of winter, the natural gas market is poised to continue lower in the months ahead amid healthy supplies,” said Tyler Richey, co-editor of Sevens Report Research.
