NGI Mexico GPI

Warmer forecast trends over the weekend added fuel to the recent short-covering rally Monday as natural gas futures extended their run higher. The October Nymex futures contract surged 8.9 cents to settle at $2.585/MMBtu, while November picked up 7.4 cents to settle at $2.625.

The natural gas futures market capped off a bullish week in fitting fashion Friday, rallying for the third time in four sessions to test the psychologically and technically significant boundary around $2.500/MMBtu. The October Nymex contract gained 6.1 cents to $2.496 after trading as high as $2.505, while November picked up 6.0 cents to $2.551.

Mexican state oil company Petróleos Mexicanos (Pemex) will seek to allocate $1.04 billion of next year’s capital expenditures (capex) to the Ixachi onshore natural gas and condensate project in Veracruz state, making Ixachi Pemex’s third-largest upstream project in the country.

Natural gas futures bulls, riding high on recent gains, absorbed a blow from a larger-than-expected weekly storage injection Thursday but regrouped to keep prices steady. After trading as low as $2.388, the October Nymex contract settled at $2.435/MMBtu, off 1.0 cent. November settled just 0.1 cent lower at $2.491.

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.

Natural gas futures rallied decisively for a second straight session Wednesday, putting bears on the run as the market begins to look ahead to winter. After picking up more than 7 cents a day earlier, the October Nymex futures contract surged another 8.7 cents to settle at $2.445/MMBtu. November added 9.5 cents to settle at $2.492.

Mexico’s natural gas pipeline contracts — criticized for months by President Andrés Manuel López Obrador as abusive and one-sided — have, in the span of days, become a government talking point to demonstrate a warming to private and foreign investment in the energy industry.

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Supportive forecasts, the prospect of limited demand impacts from Hurricane Dorian and strength in the spot market all aided in a post-holiday natural gas futures rally Tuesday. The October Nymex futures contract climbed 7.3 cents to settle at $2.358/MMBtu, while November settled at $2.397, also up 7.3 cents.