November Natural Gas Futures Plunge on Milder Weather Forecasts

Natural gas futures are trading sharply lower on Monday after gapping lower at the open. The contract is currently down $0.118 or -3.66% from its previous price, trading at $3.107 per unit. This decline comes as milder weather forecasts have reduced demand for natural gas in the Midwest and East Coast.

The latest model runs show late-season cooling demand in the South Central and Southeast fading further. This reduction in demand is coupled with near-record natural gas production levels, with lower-48 dry gas output sitting at 110.6 Bcf per day, a mere 0.5% dip from last year.

The Energy Information Administration expects dry gas production to average a record 111.2 Bcf per day this year. Meanwhile, the number of active U.S. natural gas rigs has risen by one to 135, a new three-year high, according to Baker Hughes.