Markets

Natural gas futures traded in a holding pattern Wednesday as a seemingly loose supply/demand picture kept the bulls from gaining any traction despite the arrival of December cold.

January natural gas was set to open about 6 cents lower at around $2.92 Tuesday as the market noted some heating demand losses in the overnight forecast.

Natural gas continues to expand the power generation stack in the South, where the fuel accounted for 42% of electricity generation last year and far exceeded the national average of 34%, the Energy Information Administration said Tuesday in a Today in Energy post.

Natural gas futures continued lower Tuesday, with a wintry forecast unable to persuade a skeptical market seeing signs of looseness in the fundamentals. A cold blast set to move through this week helped lead prices higher in the cash market, though increases were modest in many regions; the NGI National Spot Gas Average climbed 7 cents to $2.86/MMBtu.

January natural gas was set to open about 4 cents higher Monday to around $3.102 as projected heating demand increased in the 15-day outlook over the weekend.

There were four days of double-digit moves for natural gas futures and forwards markets, but when all was said and done, January prices averaged just a penny lower from Nov. 24 to 30, according to NGI’s Forward Look.

Moody’s Investors Service on Monday revised its price band higher for Henry Hub natural gas, the industry’s chief measure of prices, and maintained a medium-term price band of $40-60/bbl for oil.

The natural gas futures market seemed to be taking a wait-and-see approach Monday to the cold blast set to hit later this week, and the prompt-month sold off heavily despite opening higher on some cooler changes in the weekend weather data. With forecasts suggesting the mercury is about to drop, the spot market firmed on the strength of gains in the Midwest and Midcontinent; the NGI National Spot Gas Average added 14 cents to $2.79/MMBtu.

Winter has arrived for the natural gas markets, as evidenced by the broad gains in NGI’s December Bidweek Survey, where the National Average jumped 59 cents month/month to $3.12/MMBtu, which is also a mere 8 cents below December 2016’s $3.20/MMBtu.