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US natural gas futures closed January with their second largest monthly drop on recordas warmer-than-expected winter weather kept demand low, easing concerns about tight supplies.
Previous Month Nymex Natural Gas (NG1:COM) for March delivery settled at $2,684/MMBtu, its second lowest settlement so far this year, up 0.3% for the session but down 40% for the month, its biggest drop since a 42 thrashing % in January 2001.
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Despite extreme cold in many areas this week, temperatures in the lower 48 states have averaged 42.2 degrees Fahrenheit so far in January, on track for the warmest January since 2006 when temperatures averaged a record 42.8 F.
Temperatures are forecast to remain mostly cooler than normal through February 4 before turning warmer than normal until at least February 15.
The biggest unknown in the gas market involves when the Freeport LNG export facility in Texas will end its seven-month outage caused by a fire last June.
Freeport LNG applied Tuesday to the US Federal Energy Regulatory Committee for approval to add natural gas to one of the plant’s three idle units, which would be a milestone in efforts to restore production.
The plant has been pumping small amounts of gas since January 26, when regulators approved the company’s plan to start cooling parts of the plant.
Some analysts have said they don’t expect Freeport to start producing LNG until mid-February, March or even later.
