U.S. natural gas futures extended last week’s selloff and plunged 11% Monday after forecasts for milder weather across the U.S. weighed on the demand outlook.
Prices also were hurt by the delayed restart of the Freeport liquefied natural gas export plant.
Analysts said the market had built in “unrealistic” expectations of much-below temperatures this month and for Freeport LNG’s restart.
Front-month Nymex natural gas (NG1:COM) for January delivery closed -11.2% to $5.577/MMBtu, the contract’s sixth loss in the past seven sessions.
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The latest drop leaves the Henry Hub market down nearly 40% from the 14-year high near $10/mmBtu reached earlier this year.
Top U.S. natural gas producer EQT Corp. (NYSE:EQT) closed Monday -7.1% after J.P. Morgan dropped the stock from its Analyst Focus List following recent strong gains; a request for more information from the U.S. Federal Trade Commission related to its planned $5.2B acquisition of THQ Appalachia I LLC also raises questions about whether the deal will conclude.
Other natural gas producers also fell sharply Monday, including Range Resources (RRC) -6%, Antero Resources (AR) -7.5%, Coterra Energy (CTRA) -3.9%, Southwestern Energy (SWN) -6%, Chesapeake Energy (CHK) -5.8%.
Freeport LNG said Friday it expects to restart the second biggest U.S. LNG export facility at around the end of this year, pending regulatory approval, after previously estimating a mid-December restart.