Forecasts of a thaw for the Eastern U.S. next month sent natural gas futures to the steepest two-day decline in 11 years on speculation of reduced demand for the heating fuel. Gas slid as much as 12 percent as forecasters including
"The market has sold off on the expectation that the worst is behind us," said
Natural gas for March delivery dropped
Gas yesterday surged to
March gas traded
The narrowing spread and support for April contracts shows "the fundamentals are still relatively constructive" for gas prices in the coming months, Viswanath said.
Gas consumers in the East can expect "unrelenting cold" in the north-central states over the next five days, said MDA in
The low temperature in
"You had a market that was extremely long that was purely based on weather," said
Waves of polar air that stoked demand for heating fuels reduced stockpiles to 1.443 trillion cubic feet on
Storage levels were 34 percent below the five-year average for the week, a record deficit in data going back to 2005. Supplies also dropped to a record deficit to year-earlier levels of 40 percent.
"This revision implies that instead of a modest acceleration in production growth this summer, the market now requires a more significant production response," of about 1 billion cubic feet a day, on average, during the summer for stocks to approach 3.7 trillion by the end of October, she said.
Gas output will rise an average of 1.54 billion cubic feet a day in 2014 to a record 71.76 billion, the EIA said in its monthly Short- term Energy Outlook on
The need for gas during the seasonal stockpiling season, from April through October, will probably support summer prices above the marginal cost of production of
The relative strength index, or RSI, fell to 45.7 at
Forecasts of a thaw for the Eastern U.S. next month sent natural gas futures to the steepest two-day decline in 11 years on speculation of reduced demand for the heating fuel.
Gas slid as much as 12 percent as forecasters including