Natural Gas is Trading at One Month Low due to Lower Demand from Household Sector

Natural petrol prices are up on the day, but down for the week for the third week in a row due to exceptionally mild weather in the United States.

Natural petrol prices were up on the day to USD 2.191 (+1.81%), but down week to week. Natural gas prices began the week at USD 2.365 per mmBtu, but they have been falling since the first few days of March, and this week marks the third week of weekly declines. Both the April and May petrol contracts fell this week.

Natural gas prices reflect what they were in August, when they were trading around USD 10 per mmBtu. While prices began to fall as the year progressed, they remained high throughout 2022 before falling to USD 2 this month.

Working gas in storage in the United States is high 36.1% higher than a year ago, according to the EIA's latest Weekly Natural Gas Storage Report for the week ending March 17, and 22.7% higher than the five-year average. The largest increases in natural gas inventories were seen in the South Central and Midwest regions. Looking ahead to April, Tudor Pickering & Holt analysts predict roughly 370 total degree days.

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This is 17% lower than the 5-year average. According to naturalgasintel, the attention continues to shift gears to the latest in power burn, with demand continuing to surpass norms this week (plus-3.7 Bcf/d over the five-year average), but slowing relative to month-to-date results (plus-4.3 Bcf/d versus the five-year average).

Natural gas prices were USD 5.611 per mmBtu at same time last year.

Natural Gas: Price Trend and Forecast

NORTH AMERICA

Natural gas prices in the United States have recently risen. Expectations for hotter weather and higher demand drove up benchmark futures prices.

The flow of Russian gas to Europe remains a problem, as do record coal prices and the front-month contract expiration.

Natural gas prices plunged due to unfavourable market fundamentals, which impacted natural gas production costs as well. Freeport LNG delayed restarting the plant until November, causing the domestic market price to fall even further.

APAC

Natural gas prices in Asia Pacific have recently followed the same pattern as the rest of the world. Russia was concerned that any reductions in supplies would exacerbate the Asian fuel crisis, which had already pushed up prices in the first part of this quarter. Asia and Europe were fighting for a limited supply of LNG cargo.

Manufacturing prices for critical downstream derivative firms skyrocketed as China struggled to satisfy peak power demand following hydropower outages in the Sichuan region. Natural gas prices in India fell as a result of lower import prices and lower production. On the spot market, Indian petrol importers were unable to purchase LNG.

EUROPE

Natural gas prices in the region have lately risen as a result of the Nord Stream 2 pipeline supply disruption from Russia to Europe. The Dutch Title Transfer Facility (TTF), the European standard for exchanging natural gas bounced, determines the front gas month charges.

Energy and utility cost increases drive up inflation and lower margins and edges for large projects. It also benefits the downstream derivative market. Because of the recent increase in petrol prices, which caused a recession in the region, the value of the Euro fell to its lowest point.

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As per Procurement Resource, natural petrol prices are higher on the day, but lower for the week for the third week in a row due to unusually mild weather in the United States. Natural petrol prices rose on the day to USD 2.191 (+1.81%), but fell week on week.

Natural gas prices started the week at USD 2.365 per mmBtu, but they have been declining since the first few days of March, and this is the third week of weekly declines. This week, both the April and May petrol contracts fell. Natural gas prices have returned to where they were in August, when they were around USD 10 per mmBtu. While costs continued to fall as the year passed, they remained high until 2022, when they dropped to USD 2 this month.