US natural gas futures continued their decline, falling to $3.2/MMBtu as markets evaluated the outlook for gas supply in the US.
US natural gas futures continue to drop
The latest report from the EIA showed that utilities withdrew 3 billion cubic feet of natural gas from storage during the week ending November 22nd, roughly in line with market expectations, which ranged from a small build to a slight draw. While this result reinforced the view that the withdrawal season has begun, it was significantly below the 5-year average of a 30 billion cubic foot drop for the week. Prices were further pressured by expectations that the cold front in the US may turn milder later in December. However, export demand has remained robust in November, driven by Europe and Asia gearing up for winter heating. To meet this demand, US production has increased by 1.5 Bcf/day compared to the 30-day average as of Tuesday.
