Natural gas (NG=F) prices spent Monday in free fall, tumbling by more than 7.9% to drop back below the $5 mark.
After a cold shock last week that saw prices jump above $5, a mark not seen since December 2022, new predictions from meteorologists for a warmer-than-expected winter have pushed natural gas in the other direction in the steepest fall for the energy product since the end of June.
At the same time, monthly production in the US’ lower 48 states is at a record of 109.7 billion cubic feet per day (bcf/d) in December, according to data from LSEG, up the previous high of 109.6 bcf/d set in November, adding to natural gas supply and depressing prices.
Moderating the price fall, average flows of gas to liquified natural gas (LNG) plants in the US also hit a new monthly high in December at 18.9 bcf/d, up from a previous high of 18.2 bcf/d set in November. When gas is sent to LNG plants, it decreases the amounts available for storage and winter heating demand use, tightening the market.
Elsewhere in the energy market, futures on crude oil also spent Monday in a downturn, as prices on Brent crude, the international benchmark, and US benchmark West Texas Intermediate (WTI) crude both fell around 2% on Monday.
Predictions of a coming global oil supply glut have in recent months moved from estimate to reality, and oil markets have begun to price in the abundance. And in a meeting with Indian Prime Minster Narendra Modi in New Delhi on Friday, Russian President Vladimir Putin said Moscow is planning to continue sending “uninterrupted fuel supplies” to India even as the US has ratcheted up pressure on Indian refiners to curb their purchases of Russian barrels.