Natural gas prices significantly dropped in the previous session, falling by 4.1% to close at 245.8, mostly as a result of a number of market-affecting events. The main causes of this bearish trend were record-high natural gas production, warm weather, and a larger-than-expected storage build.
US utilities added 97 billion cubic feet (bcf) of natural gas to storage last week, above the market expectation of a rise of 80 bcf, according to the U.S. Energy Information Administration (EIA). The market has an abundance of natural gas because output in October increased to 103.6 bcfd, breaking the previous high of 103.1 bcfd in July.
Although there are hopes for an improvement with the start of liquefied natural gas (LNG) exports from New Fortress Energy’s plant, exports to Mexico, which had reached record levels in September, decreased in October. Looking ahead, projections for mild weather that will last into early November are anticipated to keep heating and cooling demand low, further pushing up the price of natural gas.
