US Natural Gas’s 48% Drop in a Month Set to Deepen on Supply Growth
- Drop is biggest among the main US-traded commodities on Nymex
- Continued warm weather may send demand lower in January
A worker on a rig at a drilling site in Morris Township, Pennsylvania.
Photographer: Justin Merriman/BloombergNatural gas prices in the US have almost halved in just under a month, and the downward pressure may continue as incremental production is expected to far outstrip demand growth.
Energy traders and analysts have adopted an increasingly bearish tone on natural gas as higher output levels have been met with abnormally weak demand for heating in the Northern Hemisphere this winter amid milder weather. Public drillers are unlikely to review their capital spending plans, having signaled modest production increases in the Haynesville basin in Louisiana, even after a recent plunge in futures of the heating and power-generation fuel, according to consulting firm Tudor, Pickering, Holt & Co.