Natural Gas Market Under Pressure as Warm Temperature Forecasts Reduce Thermal Energy Demand

U.S. natural gas futures are facing significant price pressure amid changing weather conditions projected for the coming weeks. According to data from Jin10, the front-month contract price declined by up to 17%, falling to $3.620 per million British thermal units during the Asian trading session. This decline erases all of the gains recorded the previous day, when natural gas prices surged 11% driven by an extreme cold wave sweeping the southern United States.

Cold Wave Triggers Surge in Thermal Energy Demand

Although the very low temperatures in recent days prompted a substantial increase in demand for thermal energy for heating and power generation, this situation appears to be temporary. The extreme weather event prompted consumers and producers to take various energy-saving measures, reflecting high market volatility in response to short-term climate changes. However, this trend did not continue as weather forecasts improved.

Warmer Temperature Forecasts Shake Demand

The National Oceanic and Atmospheric Administration (NOAA) projects that temperatures across most of the United States will be above average for this time of year. Forecast data indicates a significant rise in temperatures mid-month, a condition that will reduce thermal energy needs in the short term. The decline in demand for space heating and natural gas-based electricity generation is expected to exert ongoing pressure on futures prices, given that gas inventories are currently sufficiently available in the market.