NYMEX March Henry Hub natural gas futures declined sharply on Monday, falling approximately 8% to settle near $3.14 per million British thermal units. The sell-off was primarily driven by an updated weather outlook from the National Weather Service's Climate Prediction Center.
The agency's 6-10 day forecast indicates a high probability of above-normal temperatures across most of the continental United States from February 14-18. This pattern is expected to significantly reduce residential and commercial demand for space heating, a critical driver of gas consumption during the winter months.
The United States Natural Gas Fund (UNG), an exchange-traded fund that tracks natural gas prices, mirrored the commodity's decline, also dropping about 8%. Shares of major producer EQT saw a more modest decrease of less than 1%.
Not all energy equities followed gas prices lower. Cheniere Energy, a leading liquefied natural gas exporter, and pipeline operator Kinder Morgan both posted gains during the session. Companies with substantial fee-based infrastructure or long-term LNG contracts often demonstrate price action that is less correlated with daily spot market fluctuations.
The natural gas market remains highly sensitive to shifting weather models and inventory data. A sudden shift toward colder forecasts or an unexpected supply disruption could rapidly reverse recent price losses. Traders are now awaiting the next weekly storage report from the Energy Information Administration, scheduled for release Thursday at 10:30 a.m. Eastern Time, for further clues on supply-demand balance.
