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US natural gas contract down 7% to three-month low Monday, weighed down by a sharp drop in futures prices in Europe and forecasts for more milder US weather than previously expected.
Nymex natural gas last month (NG1: COM) for November Delivery closed -7% at $5,999/MMBtu, the lowest settlement value since July 6 after gas fell 11% in the past two sessions, although the market is still 61% higher than at the start of the year.
ETFs: (NYSEARCA:SPOILED), (UGAZF), (DGAZ), (BOIL), (KOLD), (FCG), (UNL)
US gas contract has declined for eight consecutive weeks record production and reduced exports of liquefied natural gas have allowed utility companies to pump much larger than normal amounts of gas into storage over the past month.
Gas prices fell 8% in Europe on Monday to ~$38/MMBtu for the lowest close since June 16, as strong imports of liquefied natural gas lifted gas inventories in Northwest Europe. over 90% capacity; European prices hit an all-time high of $90.91/MMBtu on August 25.
In the US, weather forecasts from the National Oceanic and Atmospheric Administration show warmer-than-normal temperatures ahead in the eastern and central US, which should reduce heating demand for the time being.
Data provider Refinitiv forecasts average US gas demand including exports will fall from 100.3B cf/d this week to 94.9B cf/d next week.
The major LNG outage includes Berkshire Hathaway’s shutdown of its 800M cf/d Cove Point LNG export plant in Maryland for three weeks of planned maintenance beginning October 1, and the continued closure of the facility. Freeport LNG’s 2B cf/day machine in Texas for unplanned work after one the explosion on June 8.
