Provident Energy Consulting

NYMEX February Gas Futures Slump, Crash Through $3/MMBtu on Way Down

The NYMEX February natural gas futures contract fell in trading Monday, slumping below the $3/MMBtu threshold for the eighth time in January.

The February contract settled at $2.911/MMBtu, a 26.70-cent drop
from Friday, trading in a range of $2.888/MMBtu to $2.983/MMBtu.
A forecast of warmer weather for parts of the US was in play, with
the most recent eight- to 14-day outlook from the US National Weather
Service predicting higher-than-average temperatures for much of the
Northeast and Southeast, compared with the below-average levels
seen of late.
S&P Global Platts Analytics projects US demand will average 100.2
Bcf/d in the next eight to 14 days, a 7.2% drop from the 108 Bcf/d
forecast for the coming seven days.
After lagging behind year-ago levels through the first half of the
month, with US demand averaging 96.4 Bcf/d January 1 through
January 15 – substantially below the 112.9 Bcf/d average for the same
period in 2018 – US demand has rebounded. Consumption has
averaged 106.5 Bcf/d since then, putting January's overall average at
101 Bcf/d, down just 3.6 Bcf/d from 104.6 Bcf/d in January 2018.
US dry gas production continues to track above year-ago levels,
averaging 84.7 Bcf/d month to date for an 11.2% year-on-year increase, which could aid in storage levels.
Currently, US natural gas storage sits at an estimated 2.37 Tcf, an
11.4% deficit to the five year average, according to US Energy
Information Administration data.
However, according to Platts Analytics, exports to Mexico hit a
single-day-high on January 24 at 5.26 Bcf/d. Exports to Mexico have
averaged 4.9 Bcf/d so far in January, compared with 4.2 Bcf/d a
year earlier.

Source: Platts 2019

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