logo
US natural gas down on mild weather

US natural gas down on mild weather

NEW YORK: US natural gas futures slid 2% to a five-month low on Friday on rising output and forecasts for mild weather through mid-May that will limit heating and cooling demand, allowing utilities to keep putting more gas than usual into storage.
On its last day as the front-month, gas futures for May delivery on the New York Mercantile Exchange fell 7.0 cents, or 2.4%, to $2.867 per million British thermal units at 8:46 a.m. EDT (1246 GMT), putting the contract on track for its lowest since November 15. That kept the front-month in technically oversold territory for an eighth day in a row for the first time since February 2024. The June contract, which will soon be the front-month, was down about 1.5% to $3.11 per mmBtu.
One factor pressuring prices in recent weeks has been fast growth in the amount of gas in storage.
After falling below normal levels in mid-January, analysts project gas inventories will rise over the five-year average in the next week or two.
After cold weather in January and February boosted demand for gas, the total amount in storage was about 1% below normal for this time of year.
Looking ahead, the premium of March 2026 futures over April 2026, which the industry calls the widow maker, fell to its lowest since April 2021, while the premium of the November 2025 contract over October 2025 rose to its highest since February 2024.
The industry calls the March-April spread the 'widow maker' because rapid price moves resulting from changing weather forecasts have forced some speculators out of business, including the Amaranth hedge fund, which lost more than $6 billion in 2006.
The industry uses the March-April and October-November spreads to bet on winter weather forecasts since March is the last month of the winter heating season when utilities pull gas out of storage and October is the last month of the summer cooling season when utilities inject gas into storage.
With gas futures down about 33% over the past seven weeks, speculators cut their net long futures and options positions on the New York Mercantile and Intercontinental exchanges for a seventh week in a row to their lowest since January, according to the US Commodity Futures Trading Commission's Commitments of Traders report.

Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Oil rises to 7-week high on US-China trade deal
Oil rises to 7-week high on US-China trade deal

Business Recorder

time6 hours ago

  • Business Recorder

Oil rises to 7-week high on US-China trade deal

LONDON: Oil prices rose to their highest in seven weeks on Wednesday as U.S. President Donald Trump said a deal had been done with China, heightening expectations of a de-escalation in trade tensions between the world's two largest economies. Brent crude futures were up $1.15, or 1.7%, to $68.02 a barrel at 1249 GMT, while U.S. West Texas Intermediate crude was up $1.31, or 2%, to $66.29. At that level, WTI reached its highest in more than two months. Trump said Beijing would supply magnets and rare earth minerals and the U.S. will allow Chinese students in its colleges and universities. Trump added the deal is subject to final approval by him and President Xi Jinping. Oil up on hopes of positive US-China trade talks The trade-related downside risk in oil has been temporarily removed, although the market reaction has been tepid as it is not clear how economic growth and global oil demand will be affected, PVM analyst Tamas Varga said. Meanwhile, Trump said he was less confident that Iran would agree to stop uranium enrichment in a nuclear deal with Washington, according to an interview released on Wednesday. For its part, Iran threatened to strike U.S. bases in the Middle East if nuclear negotiations fail and conflict arises with the United States. Ongoing tension with Iran means its oil supplies are likely to remain curtailed by sanctions. Supplies will increase though as OPEC+ plans to increase oil production by 411,000 barrels per day in July as it looks to unwind production cuts for a fourth straight month. 'Greater oil demand within OPEC+ economies – most notably Saudi Arabia – could offset additional supply from the group over the coming months and support oil prices,' said Capital Economics' analyst Hamad Hussain in a note. In the U.S., consumer prices increased less than expected in May, deepening the conviction in financial markets that the Federal Reserve will start cutting interest-rate cuts by September. Lower interest rates can spur economic growth and demand for oil. Later on Wednesday, markets will focus on the weekly U.S. oil inventories report from the Energy Information Administration. U.S. crude oil stocks fell by 370,000 barrels last week, according to market sources who cited American Petroleum Institute figures on Tuesday.

Oil rises to 7-week high as investors await trade truce details and US-Iran talks
Oil rises to 7-week high as investors await trade truce details and US-Iran talks

Business Recorder

time9 hours ago

  • Business Recorder

Oil rises to 7-week high as investors await trade truce details and US-Iran talks

LONDON: Oil prices rose to a seven-week high on Wednesday as markets assessed the outcome of US-China trade negotiations, while pessimism over US-Iran nuclear talks also provided support. Brent crude futures were up 82 cents, or 1.2%, to $67.69 a barrel at 1028 GMT, while US West Texas Intermediate crude was up 96 cents, or 1.5%, to $65.94. US and Chinese officials agreed on a framework to put their trade truce back on track and resolve China's export restrictions on rare earth minerals and magnets, US Commerce Secretary Howard Lutnick said on Tuesday at the conclusion of two days of intense negotiations in London. The two countries are the world's largest economies and oil consumers. Oil up on hopes of positive US-China trade talks Trade-related downside risk in oil has been temporarily removed, although the market reaction has been tepid as it is not clear how economic growth and global oil demand will be affected, said PVM analyst Tamas Varga. Meanwhile, US President Donald Trump said he was less confident that Iran would agree to stop uranium enrichment in a nuclear deal with Washington, according to an interview released on Wednesday. For its part, Iran threatened to strike US bases in the Middle East if nuclear negotiations fail and conflict arises with the United States. On the supply side, OPEC+ plans to increase oil production by 411,000 barrels per day in July as it looks to unwind production cuts for a fourth straight month. 'Greater oil demand within OPEC+ economies – most notably Saudi Arabia – could offset additional supply from the group over the coming months and support oil prices,' said Capital Economics' analyst Hamad Hussain in a note. Later on Wednesday, markets will be focusing on the weekly US oil inventories report from the Energy Information Administration. US crude oil stocks fell by 370,000 barrels last week, according to market sources who cited American Petroleum Institute figures on Tuesday.

US-China reach trade agreement to ease rare earth export curbs
US-China reach trade agreement to ease rare earth export curbs

Express Tribune

time12 hours ago

  • Express Tribune

US-China reach trade agreement to ease rare earth export curbs

Chinese Vice Premier He Lifeng leaves Lancaster House, on the second day scheduled for trade talks between the U.S. and China, in London, Britain, June 10, 2025. Photo:REUTERS Listen to article US and Chinese officials said on Tuesday they had agreed on a framework to put their trade truce back on track and remove China's export restrictions on rare earths while offering little sign of a durable resolution to longstanding trade differences. At the end of two days of intense negotiations in London, US Commerce Secretary Howard Lutnick told reporters the framework deal puts "meat on the bones" of an agreement reached last month in Geneva to ease bilateral retaliatory tariffs that had reached crushing triple-digit levels. But the Geneva deal had faltered over China's continued curbs on critical minerals exports, prompting the Trump administration to respond with export controls of its own preventing shipments of semiconductor design software, aircraft and other goods to China. I will be disappointed if it's true 'Rare Earth Export Curbs Lifted'. Global security from expanded wars of the waning US hegemon depends on those curbs. — Kathleen Tyson (@Kathleen_Tyson_) June 11, 2025 Lutnick said the agreement reached in London would remove some of the recent US export restrictions, but did not provide details after the talks concluded around midnight London time (2300 GMT). "We have reached a framework to implement the Geneva consensus and the call between the two presidents," Lutnick said. "The idea is we're going to go back and speak to President Trump and make sure he approves it. They're going to go back and speak to President Xi and make sure he approves it, and if that is approved, we will then implement the framework." In a separate briefing, China's Vice Commerce Minister Li Chenggang also said a trade framework had been reached in principle that would be taken back to US and Chinese leaders. The dispute may keep the Geneva agreement from unravelling over duelling export controls, but does little to resolve deep differences over Trump's unilateral tariffs and longstanding US complaints about China's state-led, export-driven economic model. The two sides left Geneva with fundamentally different views of the terms of that agreement and needed to be more specific on required actions, said Josh Lipsky, senior director of the Atlantic Council's GeoEconomics Center in Washington. "They are back to square one but that's much better than square zero," Lipsky added. The two sides have until August 10 to negotiate a more comprehensive agreement to ease trade tensions, or tariff rates will snap back from about 30% to 145% on the US side and from 10% to 125% on the Chinese side. Investors, who have been badly burned by trade turmoil before, offered a cautious response and MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.57%. "The devil will be in the details, but the lack of reaction suggests this outcome was fully expected," said Chris Weston, head of research at Pepperstone in Melbourne. "The details matter, especially around the degree of rare earths bound for the US, and the subsequent freedom for US-produced chips to head east, but for now as long as the headlines of talks between the two parties remain constructive, risk assets should remain supported." Lutnick said China's restrictions on exports of rare earth minerals and magnets to the U.S. will be resolved as a "fundamental" part of the framework agreement. "Also, there were a number of measures the United States of America put on when those rare earths were not coming," Lutnick said. "You should expect those to come off ... in a balanced way." I will be disappointed if it's true 'Rare Earth Export Curbs Lifted'. Global security from expanded wars of the waning US hegemon depends on those curbs. — Kathleen Tyson (@Kathleen_Tyson_) June 11, 2025 US President Donald Trump's shifting tariff policies have roiled global markets, sparked congestion and confusion in major ports, and cost companies tens of billions of dollars in lost sales and higher costs. The World Bank on Tuesday slashed its global growth forecast for 2025 by four-tenths of a percentage point to 2.3%, saying higher tariffs and heightened uncertainty posed a "significant headwind" for nearly all economies. A resolution to the trade war may require policy adjustments from all countries to treat financial imbalances or otherwise greatly risk mutual economic damage, European Central Bank President Christine Lagarde said on a rare visit to Beijing on Wednesday. Phone call helped The second round of US-China talks was given a major boost by a rare phone call between Trump and Chinese President Xi Jinping last week, which Lutnick said provided directives that were merged with Geneva truce agreement. Customs data published on Monday showed that China's exports to the US plunged 34.5% in May, the sharpest drop since the outbreak of the COVID pandemic. While the impact on US inflation and its jobs market has so far been muted, tariffs have hammered US business and household confidence and the dollar remains under pressure. Lutnick was joined by US Trade Representative Jamieson Greer and Treasury Secretary Scott Bessent at the London talks. Bessent departed hours before their conclusion to return to Washington to testify before Congress on Wednesday. China holds a near-monopoly on rare earth magnets, a crucial component in electric vehicle motors, and its decision in April to suspend exports of a wide range of critical minerals and magnets upended global supply chains. In May, the US responded by halting shipments of semiconductor design software and chemicals and aviation equipment, revoking export licences that had been previously issued. China, Mexico, the European Union, Japan, Canada and many airlines and aerospace companies worldwide urged the Trump administration not to impose new national security tariffs on imported commercial planes and parts, according to documents released Tuesday. Just after the framework deal was announced, a US appeals court allowed Trump's most sweeping tariffs to stay in effect while it reviews a lower court decision blocking them on grounds that they exceeded Trump's legal authority by imposing them.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into the world of global news and events? Download our app today from your preferred app store and start exploring.
app-storeplay-store