By Barani Krishnan
Investing.com -- Natural gas futures tumbled 21% for the week as the heating fuel continued its descent into a seemingly bottomless abyss despite the arrival of freezing weather in the key Northeastern U.S. region, which until this week had experienced an unusually warm winter.
The front-month March gas contract on the New York Mercantile Exchange’s Henry Hub settled down 4.6 cents, or 1.8%, at $2.41 per mmBtu, or million metric British thermal units. The session bottom was $2.343, which marked a low not seen since Dec. 29, 2020, when it fell to $2.282.
For the week, the benchmark gas futures contract lost 21%, extending to almost 65% its tumble from December’s $7 high. Prior to that, it traded at a 14-year peak of $10 in August.
An unusually warm start to the 2022/23 winter 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 2.583 tcf, or trillion cubic feet, up 9.4% from the year-ago level of 2.361 tcf, data from the Energy Information Administration showed.
Since the start of this week though, the weather has been colder, reaching 20 Fahrenheit (-6.7 Celsius) on Friday in New York City and some other key locations in the U.S. Northeast, which accounts for the largest heating market in the United States.