Warmer weather in the US triggers 6% correction on NATGAS
U.S. natural gas futures are shedding over 6% at the end of the week, breaching the $4/MMBTU threshold, as milder temperatures curtail heating demand. The decline comes as forecasts point to a moderation in the recent cold snap across key heating regions.
Demand has softened, aligning with the 5-year average over the past two days. While near-term forecasts still indicate below-average temperatures, they fall short of the extreme lows seen earlier this month. Expectations are for a return to or above seasonal norms by late January.
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Create account Try a demo Download mobile app Download mobile appThe upcoming contract rollover is also exerting downward pressure, with an estimated 60-cent impact due to the current short-term backwardation in the futures curve.
At current levels, NATGAS faces the risk of not only breaking below the key 15-day moving average support but potentially testing the 60-day moving average.
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