NYMEX January Natural Gas Settles 29.9 Cents Lower on Warmer-Than-Normal Forecast

SEATTLE (Oil Monster):The NYMEX January natural gas futures contract fell another 29.9 cents Monday to settle at $3.528/MMBtu, continuing on a path established last week and dragging the remainder of the winter strip down with it.

January traded in a $3.516/MMBtu to $3.742/MMBtu range.

The prompt-month futures contract has slumped more than $1/MMBtu since settling at $4.545/MMBtu on December 10.

The February and March futures contracts fell in tandem, slumping 30 cents and 29.8 cents to settle at $3.453/MMBtu and $3.308/MMBtu, respectively.

2018 is poised to end on a warmer-than-usual note.

The US National Weather Service's eight- to 14-day outlook shows above-normal temperatures across most of the eastern US, with the Rocky Mountains being the dividing line.

S&P Global Platts Analytics data show overall US temperatures through the balance of 2018 will average 5 degrees Fahrenheit higher than normal.

With the exception of a slight near-term bump in demand for Tuesday, where total US demand is expected to surpass 100 Bcf/d, total demand is forecast by Platts Analytics to average 97.5 Bcf/d over the balance of December.

At the sector level, the 38.9 Bcf residential/commercial demand forecast for Monday looks to be the norm for the rest of the year unless a cold snap appears.

Platts Analytics forecasts residential/commercial demand will average 38.6 Bcf/d for the remainder of the year.

Despite bullish sentiment in the market just a few weeks ago, Alan Levine, CEO at PowerHouse, said: "It is very hard to make a bullish case for gas."

"Underlying features are adding to the downside risk," he said, adding that from a supply point of view, the market is protected and alternative supply features - such as record oil production - have led to more associated gas volumes coming online.

The NYMEX settlement price is considered preliminary and subject to change until a final settlement price is posted at 7 pm EST (0000 GMT).

Courtesy: www.spglobal.com