Natural gas prices plunge 26% as warmer forecasts hit; UNG tumbles and traders eye U.S. storage data
U.S. natural gas prices plunged the most in a single day since 1995 on Monday, after forecasts for mid-February suddenly shifted warmer and supply bounced back quicker than expected. The front-month March Henry Hub contract closed down 25.7%, landing at $3.237 per million British thermal units. Commodity Weather Group slashed its heating degree day forecast by 26.3, signaling less demand for heating as temperatures rise. Output climbed to 111.6 billion cubic feet per day. Eli Rubin of EBW Analytics Group noted the supply rebound was “a far faster recovery than historic freeze-offs”—when ice clogs wells and pipelines. Meanwhile, Kpler reported that trend-following funds have taken an 18% net-short stance, betting prices will keep falling.