Provident Energy Consulting

NYMEX February Gas Falls Despite Temperatures Dropping

The NYMEX February gas futures contract fell on Thursday even though US demand rose for the fifth consecutive day.

The NYMEX front-month contract decreased 1.5 cents to settle at
$2.969/MMBtu Thursday, trading in a range of $2.961 and $3.089.
US demand increased 4.7 Bcf/d on the day to 102.9 Bcf on
Thursday. Demand has increased 20 Bcf/d in the last five days,
according to S&P Global Platts Analytics.
US heating demand grew for the second day in a row by 3.2 Bcf/d
to 48.4 Bcf/d as temperatures fell. US average temperature fell by 5
degrees Fahrenheit on the day to 37.7 degrees on Thursday.
Adding more of a bullish sentiment, US dry production fell 300
MMcf/d to 84.1 Bcf/d on Thursday, according to Platts Analytics. Dry
production has fallen approximately 1 Bcf/d in the last three days. Most
of the fall came from the Marcellus region where production fell 300
MMcf/d during that time.
The US Energy Information Administration announced a higherthan-
expected withdrawal of 87 Bcf bringing total stocks to 2.614 Tcf
for the week ending January 4. Total stocks are 204 Bcf less than
inventories one year ago and 464 Bcf less than the five-year historical
average. Most of the withdrawal came from the 35 Bcf in the Upper
Looking ahead, the most recent eight– to 14–day temperature
forecast calls for warmer-than-average temperatures for most of the
US, with especially warmer-than-average temperatures in the Pacific
Northwest, according to the National Weather Service.
The downward pressure looking forward is evident since the
NYMEX March gas futures contract is still trading approximately 14 cents below the $3/MMBtu mark. The downward pressure was felt on the day as the NYMEX March contract decreased 2.7 cents on the day to $2.813/MMBtu

Source: Platts 2019

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