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US natural gas futures climbing back

By Daniel Tyson

15:53, 22 September 2021

Natural Gas
Natural gas – Photo: Shutterstock

US natural gas futures were convulsive in morning trading Wednesday after an expected pullback while markets wait for an indication of October’s weather changes.

After dipping in early trading, Henry Hub futures were climbing out of the hole. By 11 am EDT, futures were up $0.15 to $4.82 (£3.52) per metric million British thermal units (MMBtu), but still well below last week’s highs of more than $5 MMBtu.

On Friday, natural gas futures were $5.10, up 17% in the last month, and almost double the price from six months ago.

No surprise

However, the slight pullback wasn't a surprise, analysts said.

EBW Analytics wrote that October natural gas contracts’, “rapid descent is mirroring its meteoric rise” and suggested the technical outlook forecast will see more declines in the future. “Strong production nominations, a downturn in LNG feed gas and bearish weather may further ease the path lower for natural gas in the near term,” EBW wrote.

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Don't panic

PRICE Future Group’s senior analyst Phil Flynn said concerns over pullback prices mean concerns over a natural gas crisis are unfounded.


1,939.15 Price
-0.390% 1D Chg, %
Long position overnight fee -0.0184%
Short position overnight fee 0.0102%
Overnight fee time 21:00 (UTC)
Spread 0.30

Natural Gas

2.36 Price
-0.550% 1D Chg, %
Long position overnight fee -0.1215%
Short position overnight fee 0.0995%
Overnight fee time 21:00 (UTC)
Spread 0.005

Oil - Brent

76.57 Price
-0.820% 1D Chg, %
Long position overnight fee -0.0123%
Short position overnight fee -0.0096%
Overnight fee time 21:00 (UTC)
Spread 0.04

Oil - Crude

72.40 Price
-1.050% 1D Chg, %
Long position overnight fee -0.0146%
Short position overnight fee -0.0073%
Overnight fee time 21:00 (UTC)
Spread 0.03

“I say far from it. We still have major issues on the supply side going into winter. You still have to be a hedge for a potential spike this winter. Concerns in the short term may be overplayed a bit because we are in a period of relatively weak demand. But those fears could become a reality when winter comes around,” he wrote in a note.

Winter is coming

EBW said the recent shifts only “mildly softened” winter’s bullish scenarios for natural gas prices.

“Dramatic price results are largely technically driven, but early heating season weather will prove crucial. Price volatility may soften but is likely to remain high with natural gas fundamentals extremely price-inelastic in the short term.”

The company warns that if October weather is colder than expected, expect to see natural gas futures rapidly regain last week’s bullish momentum.

Read more: Natural gas prices hit record levels

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