Warmer Temperature Forecast Leads to Gas Prices Dropping 0.40%
Gas prices are still dropping after weeks of declining value as warmer weather continues and supplies remain overstocked.
Quick overview
- Nymex natural gas prices fell to their lowest point in weeks, losing $0.012 on Wednesday.
- Warm weather and abundant supply have contributed to the ongoing decline in natural gas prices.
- The recent peace deal in the Middle East has stabilized oil supply, making it harder for natural gas prices to increase.
- The market outlook remains bearish, with expectations of continued price declines due to high supply levels.
On Wednesday, Nymex natural gas prices dipped to their lowest point in weeks, continuing a lengthy down-streak, losing $0.012 for the day.
The weather forecast for the United States for the coming days is a warm one, and gas prices have dipped as a result. For three weeks, the price of natural gas in the United States has been falling, and Wednesday marked the lowest close in weeks.
Natural gas remains historically low this year, with the opportunity for market investment plagued by unseasonably warm weather that means there is less demand for gas. The market is also being hurt by abnormally high oil injection into the supply reserves.
Middle East Peace Means Prices Could Remain Low
With President Donald Trump brokering a peace deal this week between Hamas and Israel, the oil supply in that region appears to be safe for the moment. The two groups have been fighting for months, with violent attacks targeting not just military installations but also gas and oil supplies. Now, with the war at an end for now, the oil supply in the region is no longer being threatened.
This means that natural gas prices are going to have a harder time seeing any kind of increase. Even though we are headed into the winter season, the current forecast is calling for an unusually warm winter, and gas prices may continue to be affected.
The forecast right now calls for the coming week to be relatively warm, with no cold fronts appearing yet over Canada. For the following week, the forecast shows relatively warm conditions as well.
The gas market has been bearish for months, mostly as a result of higher supply levels with regular, large injections into the supply. For the lower 48 states of the U.S. gas production was up on Wednesday about 5.8% year over year. The outlook for the market for now is completely bearish. Investors should strap in for continued price decline for now.
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