The benchmark U.S. gas costs plunged by more than 10% early on Monday in the middle of high stocks and projections of warmer-than-usual weather condition recommending really light need for area heating.
Since 9:24 a.m. ET on Monday, the front-month futures at the Henry Center, the American criteria, were trading down by 10.50% at $2.305 per million British thermal systems (MMBtu). Costs are now at their least expensive level given that the start of the summer season.
” The weekend information stopped working to trend any cooler with the setup through Dec. 26 recommending warmer than regular temperature levels and lighter than regular need will continue through completion of the month,” according to a report by NatGasWeather.com pointed out by The Wall Street Journal
NatGasWeather.com anticipates “light to really light nationwide need the next 7 days,” it stated on Monday.
Contributing to the bearish aspects are the higher-than-average stocks at the start of the winter season heating season.
The United States is getting in the heating season with the greatest gas in storage given that 2020, the U.S. Energy Details Administration (EIA) stated recently.
Furthermore, the U.S. now has 5% more gas in stocks getting in the winter season heating season than the previous five-year average, and 7% more than last October 31.
The high gas stocks are partly the outcome of a milder 2022-2023 winter season and weaker heating need, which enabled working gas stocks to overall 1,823 Bcf on April 1, 2023– completion of the previous heating season. This was 19% greater than the typical U.S. April 1 overall for the previous 5 years.
High storage levels, increasing gas production, and a milder start to this year’s heating season are putting down pressure on U.S. benchmark gas costs at Henry Center. Costs have actually fallen from a high of $3.40 per million British thermal systems (MMBtu) on November 13, to $2.21 per MMBtu on December 11.
By Charles Kennedy for Oilprice.com