Provident Energy Consulting

NYMEX December Falls From Strong Weekly Rise; Down 79.90 Cents to Settle at $4.038/MMBtu

After increasing over $1/MMBtu in this week’s trading, the NYMEX prompt-month natural gas contract retreated 79.90 cents on the day in Thursday trading, settling at $4.038/MMBtu.

This was the greatest day-on-day loss since July 17, 2008, when
the prompt month lost 86.10 cents.
Thursday's losses still represented an increase of 25 cents from
Monday, when the December contract settled at $3.788/MMBtu. The
strong run-up in prices accompanied the end of injection season, as
Thursday's injection report for last week was the final injection of
the season.
On Thursday, the US Energy Information Administration reported
an injection of 39 Bcf for the week ended November 9, slightly above
the 38-Bcf injection expected by a survey of analysts by S&P Global
Platts. Regardless of the slight discrepancy, the strong increases in
future natural gas prices this week for the winter strip demonstrated
that any injection number this week would have little impact.
With injection season ending, this injection put total US natural gas
inventories at 3,247 Bcf. This inventory was below 14% from a year ago and 15.6% below the historical five-year average.
According to the EIA, “total US natural gas stocks end refill season
at the lowest level in 13 years,” with the last-lowest levels dating back
to the week ended October 31, 2005, with a total inventory of 3,194 Bcf. This year, the market expected ever-rising production to fill in the storage deficit, but this never happened.
In the near term, production stood at 82.5 Bcf Thursday, with 800
MMcf lost day over day. Over the next seven days, production is
expected to notch up to 83.5 Bcf/d and slightly further to 83.9 Bcf/d
eight to 14 days out, S&P Global Platts Analytics data shows.
National Weather Service data shows Northeast temperatures to
be below normal over the next six to 10 days, with above-normal
temperatures expected across most of the Southwest and Texas for
this same time period. Total demand for the next 14 days is expected to average 96.5 Bcf/d, according to Platts Analytics data. The NYMEX settlement price is considered preliminary and subject to change until a final settlement price is posted at 7pm EST (2300 GMT).

Source: Platts 2018 

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