Henry Hub sinking fast
The US benchmark for the price of natural gas continued its descent on December 1 on the back of COVID-19 concerns and the forecast for warm weather.
The January gas delivery contract at the US Henry Hub was down 3.1% as of 12:25 GMT to trade at $4.43/mn Btu. So far this week, the benchmark is down nearly 20% and is at its lowest since early September.
The US contract is moving in opposite direction from the price in Europe, where low levels of gas storage are adding a premium to natural gas.
While the US government has pressed for calm, a new, more contagious variant of the novel coronavirus that causes COVID-19, Omicron, and the onset of winter in the Northern Hemisphere could lead to an economic downturn. The US Federal Reserve, meanwhile, abandoned its mantra that high inflation was going to be transitory.
But this week’s weather pattern is taking the wind out of the sails for US natural gas. The National Weather Service forecasts average highs in the Northern and Central Plains states to be well above seasonal norms for this time of year.