Natural gas futures decline as unusually mild temperatures cause steep drop in heating demand

NEW YORK – After reaching a 12-month high in November, natural gas futures have since fallen 19 per cent. Futures have declined for three consecutive days on growing speculation that mild temperatures across the U.S. will cause a steep drop in heating demand. Five Star Equities examines the outlook for companies in the Natural Gas Industry and provides equity research on WPX Energy Inc.
Unusually mild weather combined with near record inventories has created a bearish outlook for natural gas prices heading into peak demand season as roughly 50 per cent of all households in the U.S. use natural gas for heating, according to the Energy Department. Historically, from late November to the first week of February natural gas prices have fallen approximately 42 per cent.
“We see prices ultimately testing $2.20 and even last year’s sub-$2, if the weather continues to moderate,” wrote Energy OverView editor, Mike Fitzpatrick. “Like last year, we will be in a situation where we will be coming out of the peak-demand season with ample storage. The bearish sentiment will become overwhelming.”
Five Star Equities releases regular market updates on the Natural Gas Industry so investors can stay ahead of the crowd and make the best investment decisions to maximise their returns.

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