Natural gas markets are experiencing downward pressure as milder weather forecasts for north-west Europe from December 15 to 23 are expected to reduce heating demand. This has led to a decrease in European natural gas futures, which fell below €43 per megawatt-hour, marking the lowest level in a month. Despite minor outages at Norwegian facilities, pipeline and liquefied natural gas (LNG) supplies remain stable, contributing to the easing of market concerns. Additionally, European gas storage levels, although slightly below the five-year average, are sufficient to alleviate fears of depletion, especially with the anticipated mild weather.
In the U.S., the Henry Hub spot price saw an increase, rising 28 cents to $3.11/MMBtu, while the January 2025 NYMEX contract also climbed 34 cents to $3.378/MMBtu. However, regional price variations were noted, with significant increases in the Northeast due to colder weather forecasts. A force majeure on the Tennessee Gas Pipeline near Boston has temporarily reduced pipeline capacity, impacting prices in the region. Despite these regional fluctuations, the overall sentiment in the natural gas market remains cautious, with supply stability and weather conditions playing pivotal roles.
The ProShares Ultra Bloomberg Natural Gas ETF (BOIL) is down 2.04% in pre-market hours on Friday, December 13, falling to $44.75 as of 7:27 AM ET.