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U.S. natural gas futures concluded January with their second-biggest monthly drop on record, as warmer than expected winter weather held down demand, easing concerns about tight supplies.
Front-month Nymex natural gas (NG1:COM) for March delivery settled at $2.684/MMBtu – its second lowest settlement so far this year – up 0.3% for the session but plunging 40% for the month, its biggest decline since a 42% thrashing in January 2001.
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Despite extreme cold in many areas this week, temperatures in the Lower 48 states averaged 42.2 degrees Fahrenheit so far in January, on track for the warmest January since 2006 when temps averaged a record 42.8 F.
Temperatures are forecast to remain mostly colder than normal through February 4 before turning warmer than normal through at least February 15.
The biggest unknown in the gas market involves when the Freeport LNG export plant in Texas will end its seven-month outage caused by a fire last June.
Freeport LNG asked the U.S. Federal Energy Regulatory Committee on Tuesday for approval to add natural gas to one of the plant’s three idled units, which would be a milestone in efforts to restore production.
The plant has been pulling in small amounts of gas since January 26 when regulators approved the company’s plan to start cooling down parts of the plant.
Some analysts have said they do not expect Freeport to start producing LNG until mid-February, March or even later.
