Natural Gas prices opened with sharp losses on Monday as a bout of profit-taking coupled with a rising rig count sent prices of the commodity lower.
At the time of press, Natural Gas is down 5.74%, falling considerably more than other energy assets.
Despite the fact that the number of operating rigs in the US is less than half of the level of a year ago, there has been an eighth consecutive week of increases in rigs. The recent rises in prices for Oil and Natural Gas have prompted more rigs being reopened because the rising prices have made production more profitable.
Monday’s Natural Gas price decline comes after a strong week of rises last week. which saw Natural gas prices close the week 1.51% higher.
Much of the rises came from the expected increased demand from bad weather forecasts and declining supplies. The EIA reported that domestic supplies of natural gas in the US declined by 134 billion cubic feet for the week-ended January 8.
According to US government data, total stocks of Natural Gas now stand at 3.196 trillion cubic feet, a rise of 126 billion cubic feet from the same time a year ago, and 218 billion cubic feet higher than the five-year average.
Cold Weather Forecasts
As well as a cold snap sweeping through much of Europe at the moment, further cold weather is expected in the Northern Hemoisphere.
Trusted weather forecaster NatGasWeather said:
“We view the January 26-29 period as one of the best chances this winter for cold to finally come through,”
NatGasWeather
With demand set to increase, the Natural gas prices are expected rally from today’s losses.
