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Warmer Weather Sinks US Natural Gas Prices
10 Jan
Summary
- February natural gas prices hit a 2.5-month low due to warmer weather forecasts.
- US natural gas production is near a record high with active rigs at a 2-year peak.
- Inventories saw a larger than expected draw, but supplies remain ample.
Natural gas prices for February futures have plunged to a 2.5-month low, driven by an anticipated surge in warmer temperatures across the United States. Forecasts indicate milder weather from January 9-15 and even warmer conditions for January 16-23, significantly curbing the need for heating and allowing natural gas storage levels to increase.
Adding to the bearish sentiment, US natural gas production is currently near an all-time high. The Energy Information Administration (EIA) revised its 2025 production forecast upward, while active natural gas rigs recently reached a two-year peak. This robust production, coupled with reduced demand due to milder weather, has put considerable downward pressure on prices.
