Natural Gas Storage
The Season has Changed - Our First Gas Withdrawal
This past week, EIA reported the first natural gas withdrawal of the season, extracting 53 Bcf from storage. After last week’s storage report, we finished the injection season with a stockpile of 3,956 Bcf, 6.7% above the 5-year historic highlevel and 16% over last year. Upon news of the gas withdrawal, the near-termmarket rose 6.8¢, then settled unchanged for the day.
Gas reserves look great as we move into winter. Coupled with predicted above average temperatures, this bodes well for stable December prices.
Weather Forecast: Above Average Temperatures Across Most of the U.S.
The National Oceanic and Atmospheric Administration’s 3-month forecast predicts above average temperatures for all northern states as well as states west of the Rockies. Below normal temperatures are expected in central and southern Texas, New Mexico and Louisiana.
El Nino has been helping to keep temperatures mild, as December looks to be a warm month and possibly into January. Temperatures are forecast to be warmer across most of the country. Only Southern Texas and the Southern Rockies may see below normal temperatures.
Natural GasRemain Low
After the storage report, NYMEX January prices settled at $2.18. Near-term natural gas prices look to remain stable, with predictions of a mild December, just like last December, and strong storage inventories.
The 12-month strip prices are trading at $2.41, with 24-month, 36-month and 48-
month prices at $2.76, $2.76, $2.91 and$3.01 / MMBtu respectively.
Other energy commodities: Crude oil is trading under $40/barrel, well below the 52-week high of $94.58. Heating oil is trading down at $1.34/gallon; same period last year saw prices at $2.11.
Now is a great time to lock in long-term natural gas prices.
Even Winter Can't Raise Gas Prices
It’s officially winter and gas prices should be going up. But, not this year. As we begin to withdraw gas from storage, prices remain low and went even lower.
Above normal temperatures and record storage levels are forcing prices to remain low. It’s not too late to lock in fixed prices for this upcoming winter.
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