NGI Mexico GPI

Coming off big gains the previous two sessions, natural gas futures stalled Tuesday as a rally in the early morning hours quickly lost steam. The October Nymex contract settled at $2.580/MMBtu, off 0.5 cents after trading as high as $2.648. November also fell 0.5 cents to settle at $2.620.

Mexico’s President Andrés Manuel López Obrador announced on Wednesday that a deal has been reached with local pipeline company Fermaca, bringing to an end a months-long conflict over natural gas pipeline contracts in the country.

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.

Guillermo Turrent, the former head of CFEnergía, the marketing arm of Mexico’s state-owned Comisión Federal de Electricidad (CFE), strongly denied any wrongdoing in response to a report that he is being investigated for corruption.

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.