NGI Mexico GPI

Editor’s Note: NGI’s Mexico Gas Price Index, a leader tracking Mexico natural gas market reform, is offering the following column as part of a regular series on understanding this process, written by Eduardo Prud’homme.

With recent long-term weather models not providing much guidance for price direction, natural gas traders looked to the latest government storage data for inspiration. With a storage withdrawal that was bigger than what some analysts had projected, the January Nymex contract settled 2.8 cents higher on Thursday at $2.427/MMBtu. February rose 2.4 cents to $2.398.

The rollercoaster ride for natural gas prices continued on Wednesday as weather models whipsawed overnight, erasing much of the demand they had gained in recent runs. Given the lack of confidence in weather data, the January Nymex futures contract slipped 4.2 cents to settle at $2.399/MMBtu. February fell 3.1 cents to $2.374.

Mexico’s pipeline operator Centro Nacional de Control del Gas Natural (Cenagas) will open bidding on an interconnection project connecting the Mayakan pipeline in the Yucatán peninsula to the national Sistrangas grid, according to the head of Cenagas, Elvira Daniel.

Natural gas bulls are back in the game as the weather models uniformly trended colder overnight Monday. After the American data added an impressive chunk of demand in its midday run, the January Nymex gas futures contract spiked even higher before going on to settle Tuesday at $2.441, up 11.2 cents day/day. February jumped 9.7 cents to $2.405.

Natural gas users in Mexico are becoming savvier as they learn how to use the tools created by the country’s 2013-2014 constitutional energy reform, according to independent energy analyst Eduardo Prud’homme.

After Black Friday brought about one of the largest single-day losses of the year for natural gas futures, prices bounced back a little on Monday with help from one of the major weather models. The January Nymex futures contract climbed 4.8 cents to settle at $2.329/MMBtu. February rose 4.6 cents to $2.308.

Editor’s Note: This is one of a 14-piece series NGI undertook as the energy industry readied for the new year, with Lower 48 natural gas and oil supply continuing to surge in an uncertain environment as liquefied natural gas exports ramp up, Mexico markets remain shrouded and stakeholders demand more value. Get your complimentary copy of NGI’s 2020 Special Report today.

Following a steep Black Friday sell-off driven by a warmer outlook for mid-December temperatures, natural gas futures were trading slightly higher early Monday, helped by cooler revisions in the latest data. The January Nymex contract was trading at $2.331/MMBtu at around 8:40 a.m. ET, up 5.0 cents from Friday but off nearly 20 cents from pre-Thanksgiving levels.