U.S. natural gas prices closed at a fresh six-week low of $7.752/MMBtu on Monday, in a market The Wall Street Journal said has lost its bullish momentum as a lack of hurricanes off the Texas coast has opened the door for U.S. production to reach triple digits for the first time ever, topping 100B cf/day.
Front-month Nymex natural gas (NG1:COM) for October delivery edged -0.15% for its third straight daily decline totaling $1.362/MMBtu, or 14.9%.
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Bullish investors are hoping for signs of a breakout of storm activity in the Gulf of Mexico or another extreme increase in natural gas prices in Europe, but investors seem to agree that U.S. production will keep local supplies well-fed in the final months before winter arrives.
Meanwhile, benchmark European gas prices extended last week’s drop, sinking as much as 8.8% to their lowest level in nearly two months, as European energy markets have “started to improve across the last three weeks as policy action has taken shape and increasing evidence of price-induced demand response has emerged,” analysts at Timera Energy said, according to Bloomberg.
Germany’s economy minister Robert Habeck said the country’s natural gas storage levels are nearing 90%, giving it “a chance to get through winter well,” although he also noted that gas storage likely would be “empty” after winter.
Despite easing in recent weeks, European nat gas prices are still more than 7x above the average for this time of year.
U.S. natural gas tumbled last week following news that U.S. railways and unions reached a tentative labor deal, averting a strike.