Natural Gas

Prices: The front-month natural gas futures contract for February delivery at the Henry Hub settled at $2.17 per million British thermal units (MMBtu) on January 9, 2020, down 16 cents/MMBtu from December 2, 2019 (Figure 4). Prices traded in an overall band of 37 cents/MMBtu in December, the narrowest December trading band on record going back to 1990. December was significantly warmer than normal, which is evidenced by the sharp drop in heating-degree days (HDD) below the normal number for December in Figure 4. December 2018 followed a similar pattern when milder-than-normal temperatures led to declining prices. However, this year’s inventory levels are much higher. Natural gas inventories on January 3, 2020 were 19.8% higher than this time last year, which contributed to the lowest natural gas futures prices in January since 2016.