Natural Gas Supply Update
- The natural gas market has seen some exciting developments in recent weeks: Storage levels reached just under 4,000 bcf, the highest since the record-setting year of 2016, following two unexpected injections in early November.
- Regarding the impact of the recent election on gas and oil prices, it’s important to note that the President does not directly control production. Private companies make these decisions based on profitability and are unlikely to increase production solely to lower prices.
Natural Gas Storage Report
LNG Demand
- LNG exports remain strong, hovering near a 2024 high above 14 bcf/d.
- The recent election is expected to accelerate the permitting process for new LNG facilities. This could lead to higher prices if production doesn’t keep pace with increased demand in the coming years.
January NYMEX Futures (since November 15)
Natural Gas Production Report
NYMEX 12-Month Strip
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.
Weather and Demand Forecast
November 25-31 Outlook
- Midwest: A frosty cold front early in the week will bring highs in the 10s to 30s, likely increasing natural gas demand.
- West and New England: Milder conditions with highs in the 40s to 50s are expected, potentially lowering heating demand.
- Texas, South, and East: Pleasant weather from Monday to Wednesday, with highs from mid-50s to 80s, should result in light natural gas demand.
- Late Week Trend: Colder air will spread south and east, bringing highs in the 10s to 30s and significantly boosting heating demand.
Seasonal Outlook
- The arrival of colder weather has led to the season’s first withdrawal and a nearly 40-cent jump in January pricing over the past week.
- While winter forecasts lean towards milder conditions overall, we anticipate more frequent brief cold snaps compared to the past two years.
AD Hub RTC Forward Power Prices
NYMEX Rolling Prompt Month
