Provident Energy Consulting

NYMEX Gas Ticks Upward in Thursday Trading

The NYMEX February natural gas futures contract rose in trading Thursday, breaking a two-day run of declines as below-average temperatures are forecast for much of the US over the coming weeks.

The NYMEX February contract settled at $3.413/MMBtu, a 2.90-
cent increase.
The uptick in price for the February contract could be partly due to
the continued outlook of lower temperatures, as the most recent
eight- to 14-day weather outlook from the National Weather Service
calls for a likelihood of lower-than-average temperatures across most
of the US, with a high likelihood of cold weather in the Chicago area.
S&P Global Platts Analytics forecasts US demand will average 108.6
Bcf/d over the next eight to 14 days, which would be in stark contrast
to the 96.7 Bcf/d averaged month to date.
Though the front-month contract was higher, an announcement of
a below-average storage withdrawal may be capping its rise.
The US Energy Information Administration announced an
estimated 81-Bcf withdrawal from storage for the week ended January
11, which came in above the 77 Bcf expected by a consensus of
analysts surveyed by S&P Global Platts, but tracked well below the 218-Bcf draw from stocks averaged over the past five years.
The below-average withdrawal put US natural gas in storage at an
estimated 2.533 Tcf, cutting the deficit US stocks hold against the fiveyear average to 11.4%, according to EIA data.
Increased production contributed to the ability of US stocks to
narrow their deficit to a year earlier, with total dry production in the US
averaging 85 Bcf/d month to date, a 9.6-Bcf/d jump from the 75.4 Bcf/d
averaged a year earlier.

Source: Platts 2019

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