NGI Mexico GPI

Mexico’s IPGN monthly natural gas price index reached its lowest-ever average in both peso and dollar terms during March, reflecting the U.S. benchmark prices to which a majority of transactions in Mexico are linked.

After hopping in and out of positive territory, natural gas futures ended the day modestly higher as traders weighed a near-term period of elevated demand against outlooks for a more moderate mid-May that would all but certainly lead to a string of hefty storage injections. The June Nymex gas futures contract settled Monday at $2.593/MMBtu, up 1.3 cents. July rose a penny to $2.64.

Editor’s Note: NGI’s Mexico Gas Price Index, a leader tracking Mexico natural gas market reform, is offering the following question-and-answer (Q&A) column as part of a regular interview series with experts in the Mexican natural gas market.

After a brief dip into the red, the May Nymex gas futures contract rolled off the board 5.2 cents higher at $2.566/MMBtu Friday as weather models intensified an expected cold snap in the northern United States while also increasing heat for the southern states. June, which takes over the prompt-month position on Monday, settled at $2.58, up 3.2 cents.

The first survey of buyers and sellers of natural gas in Mexico conducted by NGI’s Mexico GPI shows that U.S. price indexes are involved in the majority of transactions in Mexico.

Subtle changes in daily weather models finally caught the attention of traders as natural gas futures staged a rally on Thursday that pushed the prompt month back above $2.50 despite fresh storage data that reflected a year/year surplus in inventories. The May Nymex gas futures contract jumped 5.2 cents to settle at $2.514/MMBtu, while June climbed 4.8 cents to $2.548.

Argentina and Bolivia are seeking new markets for their domestically produced natural gas via the export market amid a potential supply glut.

Weather models continued to add back some demand for the next couple of weeks, driving natural gas futures marginally higher Wednesday as the market begins to move beyond a month-long period of massive year/year weather differences that were seen pushing storage inventories to a surplus over last year’s levels. The May Nymex gas futures contract settled seven-tenths of a cent higher at $2.462/MMBtu, while June rose 0.1 cents to $2.50.

Continued power outages in Mexico’s Yucatan Peninsula have exacerbated worries about the supply of natural gas to the region amid declining production and delays to crucial infrastructure projects.