Provident Energy Consulting

NYMEX January Gas Contract Settles at $4.545/MMBtu, Up 5.7 Cents


The NYMEX January natural gas futures contract settled higher Monday, gaining 5.7 cents to $4.545/MMBtu.

The NYMEX January contract traded Monday between $4.39/
MMBtu and $4.666/MMBtu.
February and March — the remaining months of the winter strip —
settled at $4.36/MMBtu and $4.136/MMBtu, respectively.
Further out, in the balance of the 2019 contracts, April to October
contracts decreased a couple of cents to average $2.897/MMBtu.
Fundamentals were unchanged Monday, echoing the relatively
moderate NYMEX gas movements. S&P Global Platts Analytics data
showed US production falling 300 MMcf after output averaged 85.8
Bcf/d over the weekend.
Demand has lingered above 100 Bcf/d the past week. Total demand
dropped Monday to 103.9 Bcf/d, with further declines expected over
the next two weeks.
Platts Analytics forecast demand to drop roughly 10 Bcf/d over the
coming seven days to 93.5 Bcf/d. Over the next eight to 14 days,
demand is forecast to average 91.9 Bcf/d.
National average temperatures are forecast to rise above 40
degrees Tuesday after averaging 37.7 degrees over the past seven
days. Temperatures nationally aren’t forecast to drop below 40
degrees until 14 days out, Platts Analytics data showed, about 3.2
degrees above historical norms.
Stephen Schork, editor of The Schork Report, noted how
“everything is out of whack with this winter premium.” Technically,
he said, “short term, we are in a bearish run and it will take a cold
spell to get us out of this run — it’ll take 10-12 days out for the real
start to winter.”
Schork said he is looking forward to Tuesday's release of the US
Energy Information Administration’s Short-Term Energy Outlook. He
thinks the EIA’s end-of-season natural gas storage number will be
revised lower and called for 1.13 Tcf in US gas storage stocks to end the winter season.

Source: Platts 2018

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