Provident Energy Consulting

NYMEX March Gas Rises 4.6 Cents on Cold Weather Forecasts

Trading for the NYMEX March contract started out hot Tuesday, but then eased a bit, still finishing with a day-on-day rise.

The March contract settled at $2.688/MMBtu, up 4.6 cents from
Monday's close, after trading in a $2.618-$2.698/MMBtu range.
“We started out strong, probably because of the colder weather
coming, but then things eased off,” said Phil Flynn, senior energy
analyst with Price Futures Group, adding the slight rise was part of the
recovery from a recent dive in the market.
“Post-polar vortex, there was a big selloff and the market fell off,"
he said, “but the feeling is they overdid it.”
Other monthly contracts followed the front-month's lead, with April
also up 4.6 cents to $2.705/MMBtu and May 4.5 cents higher to trade
at $2.731/MMBtu.
According to S&P Global Platts Analytics, Tuesday’s dry production
fell 700 MMcf to 83.8 Bcf, which brought the month-to-date average to
83.9 Bcf/d. At the same time last year, the month-to-date average was
7.1 Bcf lower at 77.4 Bcf/d.
Production levels are expected to stay close to Tuesday’s mark,
averaging 84.05 Bcf/d the next two weeks.
Demand was also slated to come off Tuesday, checking in at 99.1
Bcf after a 4.4 Bcf fall. Looking ahead, consumption is expected to fall
even further over the next two weeks, averaging 96.45 Bcf/d.
Tuesday’s estimated storage withdrawal was not as robust as
those seen recently. Platts Analytics estimated the pull from stocks at
19.8 Bcf, the lightest draw in four days.
Most of the US is expected to experience colder-than-normal weather
over the next two weeks, but when the calendar rolls into March, things
look quite different, with temperatures near seasonal norms.

Source: Platts 2019

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