Natural Gas Futures Stall as Weather Models Remain Conflicted; Spot Gas Rises

  • Nymex natural gas futures hold steady as weather models remain at odds over intensity of next week’s cold snap
  • March/April spread essentially nonexistent and strip poised to move into contango soon
  • Market looking ahead to possibly largest storage withdrawal this winter to date
  • Spot gas prices strengthen as West leads way on chilly, wet storm system
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Natural Gas Futures, Cash Slide as Extreme Cold Loosens Grip on U.S. Midwest, East

  • March Nymex futures down 4.0 cents to $2.814; April down 4.3 cents to $2.765
  • “I don’t know what the groundhog’s going to say. It doesn’t look like winter’s over, but the polar vortex is, for where it matters,” says Powerhouse’s Levin
  • Weather pattern “relatively bullish...the next two weeks if it wasn’t for the mild spell this weekend into early next week”: NatGasWeather
  • Valley Crossing FERC filing points to potential increase in U.S. pipeline exports to Mexico: Genscape
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Potential Long-Range Cooling Seen as Front Month Futures Gain Ahead of Expiry

  • February Nymex futures expire at $2.950, up 3.9 cents; March up 3.0 cents to $2.903
  • Guidance showed “more favorable tropical forcing that should allow cold risks to increase into Week 3 after first warming things to start February,” says Bespoke
  • Potential for Top 5 largest EIA withdrawal once current extreme cold accounted for: Energy Aspects
  • U.S. pipeline exports to Mexico set new daily record high Jan. 24 at 5.25 Bcf/d: Genscape
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Medium-Range Warmth Sends Natural Gas Futures Lower; Bitter Cold Delivers Cash Gains

  • February Nymex futures down 26.7 cents to $2.911; March slides 19.9 cents to $2.873
  • Polar vortex lifting northward drives “significant warm changes” in six- to 10-day period: Radiant
  • Cash gains could support market near-term, but prices “likely to sink soon as brutally cold weather passes,” says EBW’s Weissman
  • Pipelines in Midwest, Midcontinent bracing for record-level cold this week
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