Price

The traditional call on natural gas held in storage has been threatened by warm winter weather to date and could lead to an “unmanageable level of inventories” by the end of the injection season, increasing physical congestion through 2016, BNP Paribas’ director of commodities strategy said Tuesday. Moody’s Investors Service also sharply reduced its U.S. gas price assumptions.

Physical natural gas for Thursday delivery advanced Wednesday as gains in the Midwest, Midcontinent and the East were able to tug slower performing regions such as California higher. The NGI National Daily Spot Gas Average rose 7 cents to $1.74, but futures were not as fortunate, posting their sixth loss in a row aided and abetted by forecasts of ever warming temperatures.

January natural gas is expected to open 4 cents lower Tuesday morning at $1.85 as forecasters scouring recent weather data discover another episode of moderating temperatures. Overnight oil markets were mixed.

Unseasonably warm winter weather to date has reduced the traditional call on natural gas held in storage, which may lead to an “unmanageable level of inventories” by the end of the injection season and increase physical congestion through 2016, BNP Paribas’ director of commodities strategy said Tuesday. Moody’s Investors Service also has sharply reduced its price assumptions for U.S. gas.

The chances that natural gas prices will move higher before 2017 are becoming less likely as mild temperatures this winter and more efficient wells stymie supply reductions, analysts said last week.

While most natural gas market points for the week ended Dec. 4 managed to show gains, a relatively small number in the Rockies, Northeast,andCalifornia registered losses and pulled the national average barely into the loss column. The NGI Weekly Spot GasAverageshed 2 cents to $2.07.

Natural gas bulls will likely stay penned up this winter ifNGI’s Forward Look data are to be believed. In the worst winter natural gas price outlook since 2012, the balance of winter forward curve pricing for Algonquin Citygate — a good barometer of Northeastern pricing — looks awfully flat, with price projections less than half of what they were a year ago.

For large buyers of natural gas, these days “the living is easy” with plentiful supplies and sustained low prices, but the current environment also comes with operating challenges from externalities facing local gas and electric distribution companies, a panel of gas buyers said Wednesday at the final session of the LDC Gas Forum Rockies & the West in Los Angeles.

Standard & Poor’s Ratings Services (S&P) analysts on Thursday revised lower the firm’s price assumptions for crude oil and Henry Hub natural gas to reflect the shift in near-term futures price curves and a projection that marginal production costs would be lower because of improved drilling efficiencies by exploration and production companies.