US natural gas futures slipped to around $3.02 per MMBtu, extending losses from the previous session and touching their lowest level in four months, as updated weather forecasts signalled reduced heating demand.
According to NOAA projections, central and southern parts of the US are expected to experience above-average temperatures over the next two weeks, easing expectations for late-winter consumption. The decline follows a sharp rally in January, when the March contract surged to a three-year high amid a winter storm that lifted demand and briefly disrupted supply.
Monday’s move was also amplified by thin liquidity due to the President’s Day holiday, which typically increases short-term volatility.
Normal trading and settlements resume Tuesday, with investors focusing on updated weather models and weekly storage data for clearer direction.
Despite the recent pullback, underlying fundamentals remain relatively firm. US working gas inventories are about 130 billion cubic feet below the five-year average, while LNG export flows remain near record levels, supporting structural demand.
The near-term direction will likely hinge on whether the warmer trend persists and how storage withdrawals evolve in the coming weeks.…Read more by Aditya Bhagchandani