U.S. natural gas prices fell on Wednesday to its lowest since March this year, on expectations of a warm winter season in the U.S. and Europe, implying a build-up in the inventories and low usage of the existing fuel during the season.
(NG1:COM) fell as much as 12.7% to $4.61 since yesterday’s close.
According to Bloomberg data, natural gas output from the top gas-producing basin in the U.S. – The Appalachia – witnessed a 27% fall in supply, or by 9 billion cubic feet.
In Pennsylvania, natural gas was down by over 20% stemming from well freeze-offs, and output more-than-halved in Ohio, as per Bloomberg’s estimates.
The yearly national average price of gas in 2023 is forecast to drop nearly 50 cents per gallon from that of 2022 to $3.49, according to an outlook research report published by GasBuddy.
Last week, the EIA’s natural gas inventory report showed declines of 87 bcf compared with expectations of a 93 bcf fall.
In Europe, natural gas prices have come down to levels previously seen before the Russia-Ukraine war.
According to a summary by TradingEconomics, Natural gas prices in Europe are more than 75% below record levels of nearly €350 hit in August, as record LNG imports, increased wind generation, and fuller-than-normal stockpiles ease concerns about shortages.
Seeking Alpha contributor Patient Tech Investor says NG industry expects growth primarily from LNG going forward, adding that Permian and Haynesville basins might be the locations providing sources for this coming growth.