Provident Energy Consulting

NYMEX November Expires Unchanged at $3.185

The NYMEX November natural gas futures contract was unchanged from Friday, expiring at $3.185/MMBtu Monday on the last day of trading as the front-month contract, on a warmer-than-average weather outlook.

The front-month contract traded between $3.100/MMBtu and
“Temperatures warmed up a little bit Friday through Monday, but it
is an expiring contract so a little volatility can be expected today,” said
Tom Saal, senior vice president of INTL FC Stone.
The November contract settlement has averaged $3.208/MMBtu in
the month so far, peaking at $3.32/MMBtu on October 17, largely driven by the colder-than-average weather conditions and storage concerns. The front-month contract settlement averaged $3.176/MMBtu over the past five years for the same time period.
The December contract, which starts trading as the front-month
contract Tuesday, will largely be driven by weather, Saal said. The
contract ceded 3.60 cents and slid to $3.189/MMBtu Monday, with the
National Weather Service calling for higher-than-average temperatures
across much of the US over the next six to 10 days.
“November sets the stage for the whole winter,” Saal said, noting
the expected warm start to winter.
Similar drops were also seen in the January contract, which lost
3.50 cents and was trading at $3.255/MMBtu, while the February
contract shed 3.40 cents, sliding to $3.174/MMBtu.
On the supply side, US dry gas production continued to gain
momentum, averaging 85.1 Bcf/d through the weekend, according to
S&P Global Platts Analytics data. Much of the gains came from the
Northeast and the Southeast region. Output is set to stand at 85 Bcf
Monday, down 100 MMcf day on day.
Over the next two weeks, production is projected to average 85
Bcf/d, putting downward pressure on prices despite the huge storage
deficit. Currently, national gas stocks sit at 3.095 Tcf, 16% lower than
the five-year average of 3.719 Tcf, according to the US Energy
Information Administration.

Source: Platts 2018

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