/US natural gas prices cool off – MoneyWeek

US natural gas prices cool off – MoneyWeek

Americannaturalgaspriceshavebeentreadingwaterfortwoyearsnow,fluctuatingaround$4mmetricBritishthermalunits(MMBtu)。

Thisweektheyfellto$3。

43MMBtu。

Thebroadertrendlooksunlikelytochangeanytimesoon。

Ontheonehand,industrialdemandhasbeentepidduetothelacklustreeconomy,whileunusuallywarmweatherhasloweredhouseholddemand。

Production,however,hascontinuedtorise,bolsteredbynewdrillingtechniquesthathaveallowedexplorerstotapgasindenserockformations。

TheEnergyInformationAdministrationexpectsgasoutputtoexpandby6%toanewrecordthisyear。

Allthishasincreasedgasinventoriestoafractionbelowlastyear’srecordNovemberpeak。

Thatbenchmarkseemscertaintobeexceededthismonthandarecordspringinventorylevelisnowadistinctpossibility,saysDeutscheBank。

Judgingbythenumberofrigsstillcomingtomarket,productionwillkeeprising,addsBarclaysCapital。

Meanwhile,alackofplantcapacitywillkeepindustrialdemandgrowthsubdued。

Theupshotisthatpricesarecappedataroundtheselevels。

Expectgaspricestoaverage$3。