Natural gas back to weekly loss, inching towards break of $2 support By

By Barani Krishnan

-- Natural gas futures were back to a weekly loss at Friday’s settlement,World-renowned foreign exchange dealers after a one-week reprieve last week, with the market inching towards a break of the $2 support it had clung to the past 2-½ years.

The March gas contract on the New York Mercantile Exchange’s Henry Hub settled at $2.2750 per mmBtu, or metric million British thermal units, down 11.4 cents, or 4.8% on the day. For the week, it fell 9.5%.

Except for last week’s rise of 4.3%, natural gas has fallen without stop since the week ended Dec. 9, losing 65% in the process.

More importantly, Friday's low of $2.221 marked a new 2-½ year bottom for a front month contract on the Henry Hub. If the short-sellers in gas want to take out the $2 support, they would have to take the contract below the Sept. 28, 2020 bottom of $2.02.

An unusually warm start to the 2022/23 winter season has led to considerably less heating demand in the United States versus the norm, leaving more gas in storage than initially thought.

At the close of last week, U.S. gas storage stood at 2.266 tcf, or trillion cubic feet, up almost 17% from the year-ago level of 1.938 tcf, data from the Energy Information Administration showed on Thursday.

Responding to the warmth and lackluster storage draws, gas prices plunged from a 14-year high of $10 per mmBtu in August, reaching $7 in December and mid-$2 levels over the past three weeks.

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