Provident Energy Consulting

NYMEX February Gas Settles 11.9 Cents Higher as Cold Provides Bullish Sentiment

The NYMEX February natural gas futures contract rose Thursday as wintry weather in the US Upper Midwest and Northeast provided bullish sentiment.

February increased 11.9 cents to settle $3.099/MMBtu, the first
time the front-month contract has closed higher this week.
The Central region was responsible for a 4.4 Bcf day-on-day
increase in demand Thursday as colder temperatures moved into the
region and pushed up heating demand to 15.9 Bcf, according to S&P
Global Platts Analytics.
Looking ahead, the most recent six-to 10-day forecast calls for
colder-than-average temperatures for much of the Upper Midwest and
Northeast, according to the US National Weather Service.
LNG feedgas demand contributed to the support, rising above 4
Bcf Thursday for the first time since Monday due to an uptick in
requirements at Cove Point in Maryland, according to Platts Analytics.
Counteracting some of the support, the US Energy Information
Administration announced a storage withdrawal of 163 Bcf for the
week that ended January 18, considerably less than the 273 Bcf pull
in the year-ago period. Total inventories sat at 2.37 Tcf, 33 Bcf above
the year-ago level. Inventories in most US regions are above their
year-ago levels.
Since the middle of December, US temperatures have averaged
about 4 degrees Fahrenheit above normal, reducing the deficit to the
five-year average from around 20% in mid-December to around 11% in
the week that ended January 18, according to Platts Analytics.
The warm spell came to an end this week as a cold front in the
Northeast and Midwest put overall US temperatures 2 F below the
10-year average, according to Platts Analytics, adding bullish
sentiment to the market.

Source: Platts 2019

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