Natural Gas Market Experiences 5-Week Decline of Over 50%

The natural gas market has been struggling for five weeks due to mild weather conditions.

Futures of the heating fuel on the New York Mercantile Exchange’s Henry Hub were on track for a 5% decline in the latest week, adding to the 48% drop over the previous four weeks.

This is because temperatures in the northern hemisphere have been unseasonably warm for a winter.

The front-month February gas contract on the Henry Hub settled at $3.174 per mmBtu, or metric million British thermal units, at Friday’s close.

It fell to a new 19-month low of $3.11 during the session, causing concern among natural gas bulls that the market could drop to $2 levels.

However, the market recovered, with the $3 support holding. That means natural gas market experiences 5-week decline of over 50%.

It is being reported that the natural gas market is experiencing one of its most challenging months, due to the start of what the industry describes as the warmest winter in two decades.

Statements from analysts suggest that there is still time to fix the market, but that cooperation from Mother Nature is crucial, and it needs to happen quickly.

It is stated by analysts at Houston-based energy trading consultancy Gelber&Associates in a note to their clients in natural gas that “there is still the remainder of January, as well as the months of February and March, left to go before the end of the winter withdrawal season, therefore, weather will still play a large role in the bullishness or bearishness of NYMEX gas futures prices.”

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