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U.S. natural gas futures fell sharply Monday following forecasts for mild weather to continue through late November, enough to keep homes from using their gas-powered heaters and allowing utilities to keep injecting gas into storage for at least a little longer.
Nymex natural gas (NG1:COM) for December delivery closed -7.1% to $3.264/MMBtu, the front-month’s largest one day dollar drop since March 6 and biggest one-day percentage decline since May 22.
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Natural gas-focused stocks fell broadly in Monday’s trading, including Ring Energy (REI) -8.7%, Southwestern Energy (SWN) -6.7%, Comstock Resources (CRK) -6.2%, Range Resources (RRC) -5.1%, Antero Resources (AR) -5%, EQT Corp. (EQT) -4.9%, Chesapeake Energy (CHK) -4.6%.
Analysts at Gelber and Associates said the lack of a storage report this week from the U.S. Energy Information Administration due to a planned systems upgrade has added to market volatility; EIA will resume its regular schedule on November 13.
“The lack of available storage data this week has market participants paying special attention to weather forecasts in an effort to gain insight into how the withdrawal season will play out,” Gelber said, according to Reuters.
When the data comes out, NatGasWeather.com forecast an inventory surplus of 205B cf will drop to ~165B cf “off last week’s cold shot, then increase to over 225B cf on coming warmth.”