FX.co ★ US Natural Prices Steady After Historic Daily Drop

U.S. natural gas futures are currently trading around $3.27 per MMBtu, in the wake of a dramatic 25.7% drop on Monday—the most significant one-day decline since 1995. This sharp downturn follows a major adjustment in weather forecasts, which now suggest milder, near-normal temperatures will prevail across most of the United States through mid-February. This news comes after about ten days of severe cold that had driven heating demand to exceptionally high levels. With the increase in temperatures, previously frozen wells are now thawing, enabling gas production to recover swiftly. Recently, daily natural gas output reached 111.6 billion cubic feet per day, marking the highest level since January 20. Despite this recovery, the recent cold spell likely resulted in substantial storage withdrawals, which could shift inventories from surpassing seasonal norms to slightly below average by the end of January. Meanwhile, LNG export flows continue to be robust, approaching record highs, which could prevent a significant further decline in prices despite the improving supply situation.