Natural gas stocks slipped in Tuesday's trading session as the June NYMEX contract was down another $0.074 to $2.244/MMBtu, following a $0.092 selloff on Monday, after forecasts continued to suggest the market should anticipate significant storage injections in the weeks ahead.
“Although offset by falling gas prices and increasing coal-to-gas switching, milder weather is opening the door to massive mid-May injections,” EBW Analytics Group analyst Eli Rubin said.
Devon Energy Corp (NYSE:DVN) shares fell 5.5%, while shares of Cheniere Energy, Inc eased 3%, and EQT Corporation (NYSE:EQT) stock dropped more than 4.7% in mid-afternoon trading on Tuesday.
“Although the longer-term outlook remains supportive, near-term weakness amid swelling May injections is likely in the coming weeks until greater visibility into the beginning of summer emerges,” Rubin added.
Further pressuring the natural gas market was a CNBC report that New York state is poised to become the first state in the US to pass a law banning fossil fuel combustion in most new buildings, shedding gas stoves, furnaces and propane heating in favor of climate-friendly appliances like heat pumps and induction stoves.
The law would likely take effect in 2026 for most new buildings under seven stories and in 2029 for larger buildings.
New York was the sixth-largest natural gas consumer among the states in 2020, fueling 46% of the state’s electricity generation needs, according to the US Energy Information Administration.
The agency noted that three out of every five New York households use natural gas for heating.
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