FX.co ★ US Natgas Prices Drop to 5-Week Low

U.S. natural gas futures declined by 7%, dipping below $4.30/MMBtu on Thursday, marking a five-week low. The decrease comes as traders account for milder weather forecasts, reduced demand expectations, and nearly record-level supply. Projections indicate above-average temperatures persisting through December 26, reducing the need for heating. Meanwhile, production in the Lower 48 States has increased to 109.7 billion cubic feet per day (bcfd) for December, slightly surpassing November's record and pushing storage approximately 3% above the typical seasonal levels. Despite this, last week witnessed an unusually large storage withdrawal of 177 billion cubic feet, triggered by a brief period of severe cold weather. However, robust production and substantial inventories continue to exert downward pressure on prices, although liquefied natural gas (LNG) feedgas demand has reached a new monthly high of 18.7 bcfd.