Provident Energy Consulting

NYMEX February Gas Contract Drops in Trading Wednesday

The NYMEX February natural gas futures contract declined Wednesday, reversing course from the increases seen in morning trading.

The NYMEX February natural gas futures contract settled at $3.384/
MMBtu, an 11.7-cent loss day on day, and its second-straight day of declines.
The drop in price for the NYMEX is a change of pace from what was
seen in morning trading, when the front-month contract was trading in
positive territory.
Down the curve prices have also slipped, with the March 2019
contract decreasing 10.2 cents to $3.147/MMBtu.
The decline in price could be due to the market testing new levels, as
trading had touched as high as $3.696/MMBtu on the day, before declining.
Though prices took a downward turn on the day, outlooks of colder
weather continue across the eastern half of the US, with the most recent six- to 10-day and eight- to 14-day weather outlooks from the National Weather Service calling for a likelihood of cooler-than-average temperatures, which is a change of pace from the mostly above-average temperatures that were experienced in the first half of January.
Phil Flynn, Senior Energy Analyst at Price Futures Group said, “if a
cold front settles in for a long winter’s nap” the front-month contract
could test the levels seen at the end of February.
US demand is expected to continue to increase over the coming
weeks, with S&P Global Platts Analytics projecting US demand to
average 102.7 Bcf/d over the next seven days and then 106.7 Bcf/d over the next eight to 14 days, which would fall closer in line with the 113.7 Bcf/d averaged during this time in January 2018.
Current month-to-date levels for US demand have only averaged
98.6 Bcf/d, according to Platts Analytics.

Source: Platts 2019

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