Markets

While not as eye-catching as Monday’s advance, natural gas futures nudged higher Tuesday on colder trends in the forecast. In the cash market, another day of hefty weather-driven gains in the Northeast and Appalachia overshadowed declines in the West to push the NGI National Spot Gas Average up 9 cents to $2.95/MMBtu.

Natural gas markets got a jolt Monday from the season’s first glimpse of legitimate winter cold; both day-ahead and futures prices shot out of the gates to start the week as short- and longer-term forecasts presented cooler risks, and the NGI National Spot Gas Average added 47 cents to close at $2.86/MMBtu.

December natural gas is expected to open 9 cents higher Monday morning at $3.07 as weekend weather models injected a cooler temperature regime. Overnight oil markets rose.

Texas oil and natural gas activity sustained a modest expansion in September, marking the 10th consecutive month of improvement, as the state’s producers continue to recover, according to the Texas Petro Index (TPI), a barometer of upstream health.

Near-record production and little cold weather to speak of combined to take their toll on natural gas forward markets this week, sending December prices down an average 2 cents between Oct. 27 and Nov. 2, according toNGI’s Forward Look.

December natural gas is expected to open 3 cents higher Friday morning at $2.96 as overnight weather models suggest increasing cold Canadian air short term. Overnight oil markets rose.

Even with nearly 11 Bcf/d of new takeaway capacity coming online to move more Appalachian natural gas supply to market, prices at the regional pricing hub Dominion South (DomSouth) will remain depressed until more infrastructure in northeast Pennsylvania and the Permian Basin in West Texas goes online, according to BTU Analytics senior energy analyst Matthew Hoza.

Near-record production and little cold weather to speak of combined to take their toll on natural gas forward markets this week, sending December prices down an average 2 cents between Oct. 27 and Nov. 2, according to NGI’s Forward Look.

Natural gas for weekend and Monday delivery reflected the ambivalence in the current weather outlook, as traders continue to guess which way temperatures will go with the start of winter only a few weeks away.