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U.S. natural gas futures fell to their lowest settlement in more than two months on Monday, as weather forecasts continue to show a milder than normal start to December, limiting demand as domestic production is elevated near record highs.
“The onus is on colder/bluer weather maps showing up or bearish sentiment will continue,” NatGasWeather.com said, according to Dow Jones, adding that the Energy Information Agency likely will report a larger than normal draw on gas storage for last week, reflecting higher demand from a cold snap, but surplus supply will increase again “if colder maps don’t show up in late December.”
Front-month Nymex natural gas (NG1:COM) for January delivery closed -4.2% to $2.694/MMBtu, its ninth loss in the past 12 sessions and the lowest settlement since September 26.
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Financial firm LSEG said average gas production in the Lower 48 U.S. states jumped to a record 108.4B cf/day in November, up from the previous all-time high of 104.8B cf/day in October.
Meanwhile, benchmark European TTE futures settled -7.8% on Monday, after briefly dipping below €40/MWh before ending at €41.94/MWh to a two-month low, as the market regains confidence that the continent will end the winter with plentiful gas supplies.
But RWE (OTCPK:RWEOY) CEO Marcus Krubber told the Financial Times that Europe is still vulnerable to gas supply shocks despite significant progress in cutting its reliance on Russia.