Forward Look

A rebound in natural gas forward prices that began last week kicked in high gear during the Jan. 10-16 period as frigid air finally returned to the United States after a month-and-a-half of exceptionally mild weather.

After five straight weeks of steep declines, natural gas forward prices stabilized and even posted a modest overall gain for both February and March contracts, while summer and next winter prices were up by the double digits, according to NGI’s Forward Look.

The downward trajectory of natural gas continued during the Dec. 27-Jan. 2 period as Old Man Winter remained elusive following an early season appearance, significantly easing concerns about low storage inventories. February forward prices tumbled an average 73 cents, while March dropped an average 53 cents, according to NGI’s Forward Look.

Natural gas prices continued to retreat from recent highs, with January tumbling 20 cents on average during the Dec. 19-26 period as mild weather was expected to continue through the first week of the new year.

With the return of significantly colder weather not on the radar until around the new year — and milder temperatures likely until then expected to substantially tighten current natural gas storage deficits — January forward prices plunged an average 34 cents from Dec. 13-18, according to NGI’s Forward Look.

Natural gas forward prices generally moved lower for the Dec. 6-12 period as milder weather finally moved across the country, slashing demand from earlier highs. January prices were down an average 20 cents, while the balance of winter (February-March) was down an average 12 cents, according to NGI’s Forward Look. New England pricing hubs, however, bucked the downtrend as ongoing pipeline constraints in the region continue to leave those markets vulnerable to price spikes.

A jittery natural gas market plagued by a historic storage deficit that has only worsened before the peak of the winter season got some good news on the weather front as outlooks showed warmer temperatures beginning next week, a trend that could last for the next several weeks. January forward prices plunged an average 41 cents from Nov. 29-Dec. 5, while the balance of winter (February-March) dropped an average 31 cents, according to NGI’s Forward Look.

With cold weather forecast for the medium range but the possibility of warmer weather later next month, forward prices across the country were mixed but mostly stronger for the Nov. 21-28 period, according to NGI’s Forward Look. December prices averaged 24 cents higher, while January tacked on an average 21 cents.

The natural gas forward market remained firmly strapped in on the roller coaster ride it’s been on the last couple of weeks as bitter cold continues across major population centers with no clear end in sight. December prices averaged 50 cents higher between Nov. 16 and 20, while the balance of winter (defined as January-March) averaged 48 cents higher, according to NGI Forward Look.