Natural gas prices fell -2.95% to 236.5, owing to anticipates of warmer-than-normal weather in late January, resulting in lower demand and higher production.
Prices were affected by the expectation of milder temperatures and a drop in gas use for heating. The reduction in gas supply to the United States liquefied natural gas export facilities. Which hit a three-month low, also had an impact on the fall in natural gas prices.
But because of the exceptionally cold weather. Which limited gas supplies and was expected to push daily demand to a record high. Spot power and gas prices spiked to multi-year highs.
December’s monthly record of 108.0 billion cubic feet per day (bcfd) was broken by January’s average petrol output in the Lower 48 states, according to financial company LSEG. Even so, Monday’s daily output fell to 92.8 bcfd, a 12-month low, down 14.9 bcfd from January 8–15.
Forecasters predicted a change in temperature from below average from January 16–21 to mostly above average from January 22–31. Which raised hopes for a decrease in gas consumption for heating.
With exports included, LSEG predicted that U.S. petrol demand in the Lower 48 would decline from 154.1 bcfd this week to 138.8 bcfd the following week.
Technically, the market showed indications of a protracted liquidation, as open interest dropped by 20.02% to 12084.
Support for natural gas is found at 230.4; a breach there could trigger a test of 224.3 levels. Prices may test 247.1 on a move above the likely resistance level of 241.8.