On Monday, natural gas prices dropped following a string of losses. This was despite mild winter temperatures in some parts of the US.
The prices were hovering around $2.73 per million British Thermal Units, just below the key threshold of $3 on January 25. Prices are currently at 70% below their August 2022 peak of $10.03, which was reached in August 2022. This latest drop adds to the downward pressure.
The East Coast’s cold winter has so far drained demand and sent prices down, while the southern states such as Texas are still experiencing persistently freezing temperatures. This week, the state expects another snowstorm.
As temperatures have remained higher than normal, production has stayed constant, contributing to the drop in prices. After a long shutdown, the key Freeport terminal for liquefied natural gases in Texas has resumed production.
Despite Russia’s ongoing war against Ukraine and the possibility of Russian producers flooding into the country, inventories in Northern Hemisphere look strong for next winter.
According to the Wall Street Journal, New York City has not experienced a major snowstorm in 326 days.