U.S. gas prices drop to 9-month low due to warming forecast

On Wednesday, natural gas futures in the United States fell to the lowest value in the last 9 months. This is due to softening of weather forecasts for the next few weeks, which could reduce heating demand. The futures contract fell by 23% last week.

According to Thomas Saal, a senior vice president for energy at StoneX Financial Inc., the weather is forecast to become milder and likely to remain warm for several weeks. Against the backdrop of this forecast, a decrease in gas prices is observed in most of the country.

U.S. gas demand is expected to rise to 143.4 billion cubic feet (bcf) per day this week, up from 139.9 bcf per day last week, Refinitiv reports. By next week, however, demand is predicted to drop to 111.2 bcf per day due to the expected warming in early January.

The drop in gas output to 80.4 bcf per day on Saturday was the largest since the February freeze of 2021. Nevertheless, over the past three days, gas output has managed to increase by almost 7 bcf per day.