U.S. natural gas prices stormed back from a punishing string of losses Monday as bargain hunters moved in, with front-month Nymex natural gas (NG1:COM) for November delivery settling +4.8% to $5.199/MMBtu.
Analysts were hesitant to attribute the gains to anything more than an oversold market, but the natural gas' largest one-day gain in nearly three weeks could mean investment funds and others are making a seasonal return to the market now that the injection season is nearly over and the often-bullish withdrawal season is about to begin as demand for gas-fired heating increases, according to The Wall Street Journal.
On the other hand, the market may not have hit bottom, especially as European benchmark gas prices have been steadily declining - down more than 70% from an August peak - as many countries reach almost full storage and supported by softer demand due to warm weather.
Gas storage across Europe is slightly more than 93%, with the U.K. hitting full storage, France's storage level at 99.5%, Germany at 97% and the Netherlands at 92.5%.
Separately, Bloomberg reported gas in the Waha area of the Permian Basin in west Texas traded Monday for as little as $0.20-$0.70/MMBtu, as booming production overwhelms pipeline networks and creates a regional glut.
The Texas price plunge was mostly the result of maintenance scheduled for Kinder Morgan's (NYSE:KMI) Gulf Coast Express and El Paso Natural Gas pipeline systems, according to Bloomberg.
Through last Friday, U.S. natural gas prices had plunged 49% from a 52-week closing high of $9.68 on August 22, falling for six straight sessions as well as nine consecutive weeks.