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Natural-Gas Prices Plunges

Last year was the most volatile on record for natural-gas prices, and 2023 is on pace to be an even wilder ride.

Natural-gas futures for April delivery fell 14% in morning trading as forecasters revised their near-term temperature outlooks higher and traders contemplated supply data showing inventories piling up fast and drillers dialing back slowly.

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If Monday’s move holds, it will mark the 12th trading day so far in 2023 in which futures rose or fell by at least 7%. For all of last year, there were 44 such moves, the most since at least the early 1990s when gas markets were deregulated an

“Volatility reigns supreme,” TPH & Co. analyst Matt Murphy wrote in a note to clients. He said the drop late last month to below $2 per million British thermal unit “felt like an overshoot,” but so too was the sling back up to about $3 last week.

The Houston investment bank expects gas prices to decline to the point that power producers switch to burning gas instead of coal, absorbing excess supply and balancing the market headed into 2024.