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Natural gas down 6%, correcting as potential polar vortex dawns

AuthorBarani Krishnan
Published 14/12/2022, 18:56
© Reuters.
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By Barani Krishnan

Investing.com -- The first likely polar vortex in four years might be just a week away, but natural gas still returned to a sell-off mode on Wednesday with players taking profit and attempting to correct a market that had jumped almost 30% over the past five sessions.

Natural gas for January delivery on the New York Mercantile Exchange’s Henry Hub was down 42.2 cents, or 6.1%, to trade at $6.51 per metric million British thermal units by 13:30 ET (18:30 GMT).

The benchmark gas contract had gone from a six-week low of $5.34 on Dec. 6 to a two-week high of $7.10 on Dec. 13, triggering the profit-taking and correction.

“With only a little over a week to go before a massive Polar vortex plunges into the U.S. and overspreads most of the nation with bitter cold, ice, and snow; NYMEX front-month gas futures are selling off this morning with prices oscillating in the $6.50s/mmBtu,” Houston-based energy consultancy Gelber & Associates said in a note on natural gas.

Gelber noted that January gas rose 34.8 cents to close Tuesday’s session at $6.935. “While that was a hefty gain, it was clear there was a force fighting for prices not to climb above $7.11/mmBtu,” it added.

Traders said Wednesday’s market reversal was notable because the oncoming Arctic winter blast was likely to be the coldest for a December since 2010.

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