From Bloomberg:
A closely watched U.S. natural gas price spread flipped to negative, signaling that traders have all but given up already on the prospect of a cold winter.
Gas for January delivery is now trading below February prices, a first for the 2021 contracts. January futures tumbled to a two-month low on Thursday, for the worst performance among major commodities, as near-term forecasts for chillier conditions were scaled back. Temperatures may be above normal in much of the Midwest and parts of the Northeast in mid-December, according to The Weather Company.
The market extended declines after a government report showed that only 1 billion cubic feet of gas was taken out of storage last week, much lower than the five-year average draw of 41 billion for this time of year.
Just over a month ago, hedge funds’ bullish wagers on gas climbed to a six-year high as liquefied natural gas exports rose to a record and shale drillers reined in production amid low oil prices. But with few signs of the weather cooperating to support a rally, money managers are now unwinding those bets, leaving prices futures mired below $3.
“This is Gas Vegas -- it’s gambling on picking a bottom at this point,” said Bob Yawger, director of the futures division at Mizuho Securities.
Gas for January delivery slumped 9.8% to $2.507 per million British thermal units on the New York Mercantile Exchange, the lowest close since the beginning of October. February futures slid 9.5% to $2.515.
The decline doesn’t bode well for gas drillers, who had fared better than their oil-heavy peers amid the crude rout earlier this year. Shares of gas producers including Southwestern Energy Co. and EQT Corp. fell despite a broader rally in equities Thursday.....
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Front futures off another tenth of a penny at 2.5060
Earlier:EIA Natural Gas Storage Report: We Don't Need No Stinkin' Natty
