FX.co ★ US Natgas Prices Pull Back, Still Set for Historic Week

U.S. natural gas futures declined over 3% to $4.82 per MMBtu, reversing after an unprecedented three-day surge of approximately 63%. This adjustment reflects traders re-evaluating their positions in anticipation of a significant winter storm. Despite this retreat, prices are poised for a record-breaking weekly increase, having surged over 55%, based on historical data available since 1990. Forecasts predict widespread below-average temperatures throughout much of the United States, which are anticipated to significantly boost heating demand and accelerate the depletion of storage reserves. The impending cold snap, particularly in the southern regions where gas production is concentrated, has sparked concerns about ice formation in pipelines, potentially disrupting production and exports. The most recent storage report indicated a decrease in inventories by 120 billion cubic feet, bringing the total to 3.065 trillion cubic feet. This drawdown is larger than anticipated, yet inventories remain 6.1% above the five-year average. Analysts project that the forthcoming report will reveal a considerably larger withdrawal as frigid temperatures persist.