After see-sawing around Thursday's settle, the NYMEX February natural gas futures contract ultimately settled Friday at $3.185/MMBtu, 0.4 cent lower as an increasingly bearish demand picture forms through the end of January.
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The February contract traded between $3.133/MMBtu and $3.246/MMBtu.
US National Weather Service forecasts through the end of January took a bearish turn Thursday with key Northeast and Upper Midwest demand markets projected to experience a high probability of above-average temperatures through February 1.
Platts Analytics' Bentek Energy demand projections mirrors this development, with US demand over the next 14 days expected to average just below 88 Bcf/d, possibly ending a wild January from a demand perspective with a whimper.
If projections shake out, January would close nearly 23 Bcf/d below the January-to-date average of 110.8 Bcf/d.
While the prompt-month contract held firm into the weekend, contracts down the curve weakened by larger margins, widening the deficit to the current prompt-month trading level.
The March futures contract ceded the most ground, shrinking 4.7 cents to $2.941/MMBtu while, deeper into the summer strip, July ceded 1.8 cents Friday to $2.858/MMBtu.
A contributing factor in the tepid movement of contracts down the curve comes as an updated extended weather service outlook Thursday shows above-average temperatures expected from February through May over the Northeast and Southeast, painting a bleak demand picture for the final days of winter.
Weaker demand levels could lessen the strain on national storage stocks currently sitting more than 12% below both year-ago and five-year-average levels, minimizing its impact on market movements, while production levels are expected to hold at 76 Bcf/d into February, more than 5 Bcf/d above last January, likely weighing on contracts down the curve.
The NYMEX settlement is considered preliminary and subject to change until a final settlement price is posted at 7 pm EST (2400 GMT).