{"id":89768,"date":"2024-02-13T20:58:46","date_gmt":"2024-02-14T01:58:46","guid":{"rendered":"https:\/\/ifintechworld.com\/?p=89768"},"modified":"2024-02-13T20:58:49","modified_gmt":"2024-02-14T01:58:49","slug":"u-s-natural-gas-consumption-hit-a-record-in-january-so-why-are-prices-falling","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=89768","title":{"rendered":"U.S. natural-gas consumption hit a record in January. So why are prices falling?"},"content":{"rendered":"
\n

Severe U.S. winter weather in mid-January drove natural-gas consumption to a monthly record but prices for the heating fuel have dropped to their lowest since April. That may have some traders scratching their heads. <\/p>\n

On Tuesday, the March contract for natural-gas futures
\n NGH24,
\n -0.47%<\/bg-quote><\/p>\n

NG00,
\n -0.47%<\/bg-quote>
\n fell 7 cents, or 3.5%, to settle at $2.01 per million British thermal units \u2014 the lowest finish for a front-month contract since mid-April, FactSet data show.<\/p>\n

\n

The shift lower in prices is due to a \u201clack of new buying interest and the resilience of short shellers,\u201d said Brian Swan, senior commodity analyst at Schneider Electric, in a daily note. <\/p>\n

\u201cMild weather forecasts are keeping national demand for natural gas low, maintaining low prices\u201d for the March contract, he said, though colder conditions expected in mid-February might increase demand later this month. <\/p>\n

Traders are \u201cadapting to changing weather forecasts,\u201d said Swan. Recent cold predictions in February are likely to temporarily lift the market, without altering the overall downward trend,\u201d he said.<\/p>\n

In a monthly report released Tuesday, the Energy Information Administration showed that U.S. dry natural-gas production, which is consumer-grade natural gas, fell to 102 billion cubic feet (bcf) per day in January, from a monthly record of 106 bcf per day in December. <\/p>\n

<\/p>\n

<\/p>\n

<\/p>\n<\/figure><\/div>\n

Natural-gas consumption, however, climbed to 118 bcf per day in January, the \u201cmost in any month on record,\u201d the EIA said.<\/p>\n

A burst of cold weather increased demand for heating, and reduced natural-gas production, leading to high inventory withdrawals, according to the EIA. <\/p>\n

Despite the high inventory withdrawals in January, the EIA expects domestic natural-gas inventories to remain above the previous five-year average. It expects roughly 15% higher natural-gas inventories at the end of this winter, compared with the five-year average, citing forecasts for milder weather.<\/p>\n

Domestic natural-gas consumption, meanwhile, is expected to fall below the average in February and March of this year as a result of milder weather, the EIA said. <\/p>\n

It sees 4% fewer heating degree days than the prior 10-year average for those two months. Heating degree days are defined as a measure of how cold a location is over a period relative to a base temperature. <\/p>\n

Against that backdrop, the government agency said U.S. spot natural-gas prices are likely to average $2.65 per million British thermal units in 2024, which is down 0.2% from the forecast released in January, and $2.94 in 2025, down 0.1% from the previous forecast. <\/p>\n

\u201cThe cold weather last month sent us into record-setting natural gas consumption territory for a few days, but we expect less-than-average consumption going into February and March,\u201d said Joe DeCarolis, EIA administrator, in a press release.<\/p>\n

He warned, however, that \u201cany late-winter cold snaps could introduce significant volatility back into the natural gas market.\u201d<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Severe U.S. winter weather in mid-January drove natural-gas consumption to a monthly record but prices for the heating fuel have dropped to their lowest since April. That may have some traders scratching their heads. On Tuesday, the March contract for natural-gas futures NGH24, -0.47% NG00, -0.47% fell 7 cents, or 3.5%, to settle at $2.01 […]<\/p>\n","protected":false},"author":1,"featured_media":89769,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-89768","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-markets","tag-featured","post_format-post-format-gallery"],"yoast_head":"\nU.S. natural-gas consumption hit a record in January. 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