Provident Energy Consulting

NYMEX February Gas Contract Rises as LNG Feedgas Demand Hits All-Time High


The NYMEX February natural gas futures contract increased on Friday as LNG feedgas demand hit an all-time high, overpowering a bearish withdrawal.

The NYMEX front-month contract increased 9.9 cents to settle at
$3.044/MMBtu Friday, trading in a range of $2.894-$3.049/MMBtu.
Although total US demand fell 4.7 Bcf/d on the day to 101.4 Bcf/d,
LNG feedgas demand hit an all-time high, and exports to Mexico
rejuvenated to levels seen before the holiday period, adding to bullish
sentiment Friday.
LNG feedgas demand hit a record 5.4 Bcf/d on Friday, up 100
MMcf/d on the day, according to S&P Global Platts Analytics. Elevated
feedgas was driven by Corpus Christi, where volumes approached 0.6
Bcf/d the past two days.
Adding even more upward pressure, exports to Mexico returned to
levels seen in the first half of December, following a decline over the
holidays. Exports to Mexico sat at 4.8 Bcf/d on Friday, after averaging
4.2 Bcf/d the last 10 days, according to Platts Analytics.
Counteracting some of that bullish sentiment, the US Energy
Information Administration announced a lower-than-expected
withdrawal of 20 Bcf, bringing total stocks to 2.705 Tcf for the week
ending December 28. Total stocks are 450 Bcf less than inventories
one year ago and 560 Bcf less than the five-year historical average.
The withdrawal of 20 Bcf was almost 70 Bcf weaker than the five-year
average withdrawal at this time.
Also adding some downward pressure, higher-than-average
temperatures are expected across the entire US, according to the most
recent eight to 14-day forecast from the National Weather Service.
The South Central region faced especially warm weather lately. The
region injected 20 Bcf for the week ending December 28, according to
the EIA, the only region that experienced an injection.

Source: Platts 2018

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