Natural gas futures finished lower for the week after reaching a multi-year high on Thursday.
Traders said the volatile price action was fueled by soaring prices in Europe and Asia, a bearish government storage report, and forecasts calling for milder temperatures into the end of the month.
Traders seemed to shrug off the global price spike late in the week because supply conditions were improving in the United States.
Weekly Weather Outlook
Bespoke Weather Services said given the warmth in the 15-day outlook, October is on track to rival 2016 for the lowest demand seen in any October in its historical dataset that dates back to 1980.
“The only chill in the pattern over the next couple of weeks is focused out in the interior West, with the eastern half of the nation very, very warm.”
Analysts expect the low-demand pattern to continue into late month – if not into at least the start of November – because of the prevailing La Nina base state. The wind has also started to pick up after being at shallow levels in recent days.
The mild weather pattern – already with several weeks under its belt – has vastly improved the once perilous storage situation in the Lower 48.
US Energy Information Administration Weekly Storage Report
The US Energy Information Administration (EIA) reported that domestic natural gas supplies rose by 118 billion cubic feet (Bcf) for the week ended Oct. 1.
That was larger than the average increase of 111 Bcf forecast by analysts polled by S&P Global Platts. Total stocks now stand at 3.288 trillion cubic feet (Tcf), down 532 Bcf from a year ago and 176 Bcf below the five-year average, the government said.