Natural-Gas Prices Plunge as Unseasonably Warm Weather Is Forecast -- Commodities Roundup

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MARKET MOVEMENTS:

- Brent crude oil fell 3.4% to $79.31 a barrel.

- European benchmark gas fell 4.6% to EUR 68.96 a megawatt-hour.

- Gold futures are up 0.9% to $1,863.70 a troy ounce.

- Three Month copper is 1% lower at $8,239 a metric ton.

- Wheat futures fell 1.2% to $7.66 a bushel.

TOP STORY:

Natural-Gas Prices Plunge as Unseasonably Warm Weather Is Forecast

A sharp rise in temperatures has erased the effects of last month's winter storm. Now forecasts for more unusually warm weather are melting down natural-gas prices.

Natural-gas futures for February delivery dropped 11% on Tuesday to end at $3.988 per million British thermal units. That is down more than 50% from summer highs and is about what gas cost a year ago, when temperatures were also warmer than normal and before Russia's invasion of Ukraine jolted energy markets.

The plunge is a bad omen for drillers, whose shares were among the stock market's few winners last year. Cheaper gas is good news for households and manufacturers whose budgets have been busted and profit margins pinched by high fuel prices.

OTHER STORIES:

Renewable Companies Strive for 24-Hour Power

Wind and solar developers are concocting elaborate plans to provide round-the-clock renewable power, the industry's holy grail as countries around the world shift to green energy.

Renewable energy is notoriously unreliable, generating electricity only when the wind is blowing and the sun is shining. Project developers, utilities and grid operators are trying a mix of options to overcome that challenge, including building huge amounts of renewable capacity, storing excess power on batteries, and using algorithms to make project economics work.

MARKET TALKS:

Brent Crude Prices to Reach $110 a Barrel in 2023, UBS Says

1025 GMT - Brent crude prices are to reach $110 a barrel in 2023, while WTI is expected to climb to $107 a barrel, according to analysts at Swiss investment bank UBS who are expecting strong returns within energy this year. UBS expects crude oil to be the top energy performer this year, compared with coal and natural gas in 2022, and China's reopening is set to be key to this with demand likely reaching a record high in the second half, the analysts say in a note. Russian oil production is likely to fall on Europe's embargo, they say, noting that OECD oil inventories are at their lowest level since 2004. Brent trades just above $80 a barrel. ([e-mail])

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Natural-Gas Prices Slide as Demand Slips

0951 GMT - Prices for natural gas are continuing to slide, as warmer temperatures and higher stocks help to dampen demand. Benchmark Dutch TTF gas prices are down 2.8% to EUR70.31 a megawatt hour--the lowest since Feb. 16, 2022. Tuesday's close at EUR72.31 was also the lowest closing since Russia invaded Ukraine. The decline in natural-gas prices might cut the level of gas-to-oil switching, says Helge Andre Martinsen, senior energy analyst at DNB Markets, in a note, in turn helping to ease crude-oil prices too. ([e-mail] )

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Metals Markets Mixed Ahead of Fed Meeting Minutes

0830 GMT - Metals markets are mixed in early trading, with investors looking ahead to today's release of minutes from the last Federal Reserve meeting. Three-month copper is up 0.8% to $8,386 a metric ton while nickel is down 2% to $30,700 a ton. Gold futures, meanwhile, are 1% higher at $1,863.80 a troy ounce, helped by a sliding dollar. Today's release of minutes from December's Federal Open Market Committee meeting is expected to shed some light on why the Fed expects inflation to linger this year. "Given the dearth of Fedspeak since the December FOMC meeting, Wednesday's minutes from that meeting will also be crucial for shaping policy expectations into the January Fed meeting," Stephen Innes, Managing Partner at SPI Asset Management adds in a note. ([e-mail] )

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Crude Oil Prices Fall as Worries Over Global Economy Rise

0833 GMT - Crude oil prices are sliding in early trading as worries over the global economy continue to mount. Both Brent crude and WTI are down 1.6% to $80.78 a barrel and $75.61 a barrel respectively, as the market digests news about higher covid cases in China and how this will affect oil demand. Global indicators such as Tuesday's China Caixin PMI, as well as potential for a recession in the U.S., also point to hesitancy from oil investors, says Stephen Innes, managing partner at SPI Asset Management, in a note. ([e-mail] )

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Australia LNG Exports Set to Fall in 2023

0517 GMT - Australia's liquefied-natural-gas exports are poised to fall this year for the first time in a decade, as gas production declines and the country continues to divert natural-gas supply to the domestic market to meet strong demand, Fitch Solutions says in a note. It attributes the bearish outlook to declining output from aging gas fields supplying the North West Shelf, Australia's largest LNG project, and gas producer Santos's weak guidance. These factors coincide with expectations that Australia's natural-gas consumption will rise by 3% this year, supported by the government's recently imposed A$12-a-gigajoule cap on domestic gas prices, Fitch says. As a result, it expects Australia's LNG exports to fall to 97.0 billion cubic meters in 2023 from an estimated record of 101.7 bcm in 2022. ([e-mail] )

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(END) Dow Jones Newswires

01-04-23 0758ET