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U.S. natural gas futures sank 7% to a three-month low Monday, weighed by sharp declines in European futures and forecasts for milder U.S. weather than previously expected.
Front-month Nymex natural gas (NG1:COM) for November delivery closed -7% to $5.999/MMBtu, its lowest settlement value since July 6 after gas dropped 11% over the past two sessions, although the market remains 61% higher YTD.
ETFs: (NYSEARCA:UNG), (UGAZF), (DGAZ), (BOIL), (KOLD), (FCG), (UNL)
U.S. gas futures have declined for eight straight weeks on record production and reduced liquefied natural gas exports that have allowed utilities to inject much bigger than normal amounts of gas into storage over the past month.
Gas fell 8% in Europe Monday to ~$38/MMBtu for their lowest close since June 16, as strong imports of liquefied natural gas raised the amount of gas in storage in Northwest Europe above 90% of capacity; European prices hit an all-time high of $90.91/MMBtu on August 25.
In the U.S., weather forecasts from the National Oceanic and Atmospheric Administration show warmer than normal temperatures ahead in the eastern and central U.S., which should reduce heating demand during the period.
Data provider Refinitiv forecast average U.S. gas demand including exports would fall from 100.3B cf/day this week to 94.9B cf/day next week.
Major LNG outages include Berkshire Hathaway’s shutdown of its 800M cf/day Cove Point LNG export plant in Maryland for three weeks of planned maintenance starting October 1 and the continuing shutdown of Freeport LNG’s 2B cf/day plant in Texas for unplanned work after an explosion on June 8.
