Natural Gas Posts Decline

January 2, 2013 10:04 AM
 

The February 2013 Natural Gas contract fell eleven cents today after opening at the bottom end of its previous range. This establishes a new three-month low for nattie on the heels of a milder January forecast. While natural gas futures tend to seek a seasonal low this time of year, stocks on hand and production are both high -- add to that a mild forecast and we have a recipe for fresh support.

Natural gas futures have shown a tendency to throw fits of a dime or more in a single day. With this in mind, more action to the downside would come as no surprise. A refreshed, cooler February forecast could eliminate most of these gains, but at the moment, it appears the eastern two-thirds of the U.S., which consumes the largest share of natural gas for home heat, will be, according to NOAA, around eleven degrees F higher than average.

Currently, stocks on hand are 2.3 percent above last year's levels at this time and a strong 12.8 percent above the five-year average. Today marks the second consecutive day of sharp declines for natural gas, and the revised, warmer forecast has experts suggesting the declines may continue, pressing nattie futures closer to the three dollar mark on waning demand.

As of now...

February 2013 Natural Gas contract down 11 cents on the day to 3.23.


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