Houston — The February bidweek national average natural gas price dropped 84 cents compared with January's bidweek price to $3.45/MMBtu, according to Inside FERC's Gas Market Report, as the market factored in the likelihood of increasingly bearish weather conditions in key demand centers around the US.
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The February bidweek price at the benchmark Henry Hub point fell 55 cents to average $3.39/MMBtu, a nearly 14% decrease from the January price.
That came as the NYMEX February gas futures contract expired at $3.391/MMBtu, a more than 33 cent decline since ending December trading at $3.724/MMBtu. The February contract also ended nearly 54 cents below the January contract's expiry.
The slide in February prices came as the US National Weather Service's outlook for the first two weeks of the month turned increasingly bearish, calling for above-average temperatures across much of the western half of the US, likely dampening incremental gas demand.
In California, the bidweek price for Southern California Gas city-gate fell 39 cents, or almost 10% compared with January, to average $3.53/MMBtu. In contrast, spot prices at SoCal Gas city-gate reached as high as $3.75/MMBtu during January as unseasonably cold weather and strong demand pushed the spot market to some of the highest levels of the ongoing winter.
Upstream, in the Rockies, bidweek prices at Cheyenne Hub fell just over 55 cents to average $3.14/MMBtu.
In the Midwest, bearish expectations for February pushed prices down even more, with Chicago city-gates dropping 77 cents to average $3.40/MMBtu.
The biggest declines were reserved for premium Northeast markets, however, as Algonquin city-gate bidweek prices fell almost $4.70 to average $7.39/MMBtu.
Upstream in the Northeast producing regions, Dominion Appalachia prices also saw a reversal from last month. After reaching a bidweek price of $3.33/MMBtu in January, its first time above the $3/MMBtu mark since June 2014, the February price fell 35 cents to average $2.98/MMBtu.
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