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EIA: NATURAL GAS STORAGE REPORT


Winter Storm Heather that crossed the USA over the last few weeks significantly increased the demand for gas and electricity, and the freezing temperatures put a large dent in production. During Winter Storm Heather, production dropped from just over 105 bcf/d to over 90 bcf/d. This helped increase the large withdrawal we saw in the last storage report.

The latest gas storage report was the highest withdrawal in at least a year. The hefty withdrawal of -326 Bcf brought our Natural Gas storage surplus to just 4.0% over last year and 5.2% over the five-year average.

NYMEX CALENDAR STRIPS

In 2023, a trend of future pricing projected higher pricing in future years, with pricing for electricity and gas tend to bunch up two four years out, the following year slightly lower, and the current year pricing at the lowest. Pricing in 2024 has followed that trend. Pricing in 2025 is roughly $0.60 higher than current year pricing, and both 2026 and 2027 are another $0.30 higher.


ALL ABOUT THE NYMEX TWELVE-MONTH STRIP

  • The NYMEX Twelve Month Strip is the average of the upcoming 12 months of closing Henry Hub natural gas futures prices as reported on CME/NYMEX.
  • A futures strip is the buying or selling of futures contracts in sequential delivery months traded as a single transaction.
  • The NYMEX Twelve Month Strip can lock in a specific price for natural gas futures for a year with 12 monthly contracts connected into a strip.
  • The average price of these 12 contracts is the particular price that traders can transact at, indicating the direction of natural gas prices.
  • The price of the NYMEX Twelve Month Strip can show the average cost of the next twelve months’ worth of futures.
  • The NYMEX Twelve Month Strip is also used to understand the direction of natural gas prices and to lock in a specific price for natural gas futures for a year.

A TIMELINE OF WEATHER & POLITICAL EVENTS AFFECTING GAS PRICING

NATURAL GAS PRODUCTION

Exports continue to affect us. We now export record amounts of Liquid Natural Gas from the Gulf Coast, about 15 Bcf daily. Combine that with the 6-7 Bcf a day being exported by pipeline to Mexico, and it is no wonder that the United States is the largest exporter of LNG in the world by a good margin.

WEATHER: 6-10 DAY AND 8-14 DAY OUTLOOK

Jan 29-Feb 4:
Get ready for an active week of weather across the US! As different weather systems move through the country, we’ll see a mix of rain and snow.

Expect very light national natural gas demand for the next five days and slightly lighter demand afterward.

Northern US:
Temperatures will range from excellent to mild, with highs mainly in the 30s to 50s. New England will be a bit colder, with highs in the 20s.

Southern US:
Things will be milder here, with temperatures ranging from the 50s to the 80s.

Next Weekend:
Watch for a colder weather system heading towards the East Coast. This will bring rain and snow, with highs in the teens to 40s and lows in the 0s to 30s. Meanwhile, the rest of the country will stay relatively mild, with temperatures in the 30s to 70s.