Gas for February delivery was at $2.919 per million BTU Thursday morning on the New York Mercantile Exchange. This is the first such low trading value since May 2021 after sliding below $3 on Wednesday.
All previous worries that suppliers would not be able to meet demand during the winter were canceled out for a number of reasons, which led to a drop in gas prices.
There are some main reasons for the fall:
- The US and Europe were able to fill gas reserves before the winter period, and favorable temperatures did not increase the demand for heating.
- The protracted closure of a large Texas liquefaction terminal has reduced US gas exports and boosted domestic supplies.
- The production of natural gas in the United States has increased, as a result of which more and more fuel has entered the market.
Natural gas has become a hot commodity in recent years, with prices hitting an August high due to a fuel supply crisis amid Russia’s invasion of Ukraine.
However, according to data from the US Commodity Futures Trading Commission, hedge funds have become the most bearish in terms of US gas prices in almost three years.
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