Heating Demand Seen Easing as Natural Gas Futures Pull Back; Impending Cold Shift Boosts Cash

  • February Nymex futures down 9.0 cents to $3.501; March slides 4.0 cents to $3.249
  • “We see a very significant cold signal dominating for the first half of February”: Bespoke
  • “Anomalously warm” first half of winter to give way to an “invasion of Arctic air” starting this weekend, says Radiant
  • Too early to assess potential freeze-offs from upcoming cold, says Genscape
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NatGas Futures, Cash Rally Big as Polar Air Set to Pour Into U.S.

  • February Nymex surges 49.2 cents to $3.591; March up 34.4 cents to $3.289
  • Frigid temps to move in this weekend and continue through end of January, widening deficits and potentially causing freeze-offs: NatGasWeather
  • “Once March gets more involved we could see the February contract potentially test the $3.75 level,” says Bespoke
  • Lower 48 production recently back above 86 Bcf/d after recent dip below 85 Bcf/d, says Genscape
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Natural Gas Futures Finish Strong on Further Cold Trends for Late January

  • February Nymex futures up 13.0 cents to $3.099; March up 13.2 cents to $2.945
  • GFS seeing “several frigid cold shots with at least some polar air” tracking into northern and eastern U.S. Jan. 20-25, says NatGasWeather
  • EIA storage data indicates market loose by more than 4.0 Bcf/d for week ended Jan. 4: Genscape
  • Outlook for rest of 2019 “remains bearish with the end of injection season 2019 as vulnerable to weak prices tied to storage containment fear,” says Societe Generale’s Dougherty
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Natural Gas Futures Slide as EIA Withdrawal Shrinks Deficits

  • February Nymex futures down 1.5 cents to $2.969; March down 2.7 cents to $2.813
  • “It has been a frustrating week for natural gas bulls,” says Bespoke
  • “We now believe it is possible that storage levels can normalize in the back half of winter”: Jefferies
  • U.S. pipeline exports to Mexico rebounding after holiday season slump, says Genscape
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Models Differ on Timing of January Cold as Natural Gas Futures Range-Bound

  • February Nymex futures up 1.7 cents to $2.984; March up 0.5 cents to $2.840
  • Euro model trends colder but doesn’t match GFS for cold starting Jan. 20: NatGasWeather
  • Warm temperatures in December and early January have created “substantial inventory cushion”: Energy Aspects
  • BREAKING: EIA reports a 87 Bcf storage withdrawal for the week ending Jan. 4. However, a 4 Bcf reclassification for a prior week brings the week's net change to a 91 Bcf withdrawal
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Potential for Arctic Air Over East Teases Natural Gas Futures as Cash Strengthens on Near-Term Cold

  • February Nymex futures up 2.3 cents to $2.967; March up 1.2 cents to $2.835
  • “The market is clearly jumpy,” reacting to shifts in weather models, says Bespoke
  • “Season-to-date, this winter has been a tale of two halves,” says TPH
  • SoCal Border Avg., SoCal Citygate spot prices down as Southern California Gas sees demand easing
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Colder Forecast Trends Not Convincing as Natural Gas Futures Drop

  • February Nymex down 10.0 cents to $2.944; March down 5.8 cents to $2.847
  • Cold Jan. 10-15 would “look more impressive if it wasn’t for strong high pressure quickly returning Jan. 16-20”: NatGasWeather
  • Feedgas demand for U.S. LNG exports up ~2 Bcf/d (80%)  in 4Q2018, says RBN’s Nasta
  • Weak spot prices continue as U.S. Lower 48 sees comfortable temperatures
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Potential January Cold Helps Natural Gas Futures Shake Off Bearish EIA Storage Report

  • February Nymex futures up 9.9 cents to settle at $3.044; March up 9.3 cents to $2.905
  • “Weather model guidance has finally begun to pick up on the colder weather risks we expected to develop in the middle third of January,” says Bespoke
  • EIA’s reported 20 Bcf weekly withdrawal loose even compared to previous holiday weeks: Genscape’s Fell
  • “Continued mild weather this winter could bring forward the risk of storage congestion to summer 2019,” says BofA Merrill Lynch
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Natural Gas Futures, Spot Prices Under Pressure as Mild Temps Seen Through Mid-January

  • February Nymex down 1.3 cents to $2.945; March off 1.7 cents to $2.812
  • “No change bigger picture as a rather bearish pattern is expected into mid-January, rapidly improving deficits”: NatGasWeather
  • Near-term natural gas demand outlook “keeps turning bearish,” according to Genscape
  • BREAKING: EIA reports 20 Bcf withdrawal from U.S. gas stocks for week ended Dec. 28, vs. surveys for ~44-47 Bcf pull
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