US natural gas contracts record the largest annual losses in 17 ‎years

US natural gas contracts incurred their largest annual losses in 17 years in percentage terms during 2023.

The largest annual natural gas losses since 2006 came amid pressure from record production levels, relatively mild weather, and abundant reserves.

When trading was settled on Friday, the twenty-ninth of December, natural gas contracts for February delivery fell by about 1.7% to levels of $2.51 per million British thermal units.

Over the course of the current year, US natural gas contracts declined by about 44%. The losses recorded for the total of the current year are the first in 4 years

Price losses came after they reached levels of $10 per million British thermal units last year, after the start of the war between Russia and Ukraine.

Natural gas contracts began this year around $4 levels, but declined further as production intensified.

The management consultant at C.H. said: Guernsey Chen Zhou, in statements reported by Reuters, said that prices reflect the fundamentals of the bearish market, which are represented by record production levels and weak demand due to warmer than usual weather, as well as weak foreign demand.

Data from the US Energy Information Administration showed that the contiguous US states have entered the winter heating season and have the highest level of natural gas storage since 2020.

Natural gas stocks stabilized at 3.49 trillion cubic feet, which is a level about 11.1% higher than the levels of the same week last year, and it is also higher than the 5-year average by about 10%.