NATURAL GAS HEADLINES: STORAGE
The market continued to rise with the onset of cold January weather. With below-average temps ready to cover most of the nation, demand for heat is expected to go up, and natural gas drilling in areas like South Dakota could see wellhead freeze-offs, affecting production. The market for prompt month Natural Gas is now approaching $3.00.
LNG EXPORTS
Another factor affecting pricing has been the increase in LNG exports. We reached a new record of exports last week, with 15.1 Bcf shipped overseas out of facilities on the Gulf Coast. This number will increase over the next two years as more LNG export facilities open in the Gulf and East Coast.
NATURAL GAS PRODUCTION
Production did fall off of the record amount we had been seeing over the last few weeks as production dropped from 105 Bcf a day down to 103 Bcf a day from the Lower 48. Despite this slight drop, we still produce roughly 5-6 more Bcf daily than a year ago.
The market for gas and electricity has climbed since mid-December on the prediction of a colder January. Past cold spells have been shorter over the last few years so we could still see a warm second half of January. If Spring arrives early in March or April, we could see another low below $2.50, possibly $2.00.
WEATHER: 6-10 DAY AND 8-14 DAY OUTLOOK
January 8-14: This week, a robust weather system will sweep across the United States, bringing a mix of rain and snow. Expect mild temperatures in the southern and eastern regions, with highs ranging from the 40s to the 70s. Meanwhile, the northern and central parts of the country will experience cooler to colder conditions, with highs in the 10s to 30s.
A frigid cold front will move into the Rockies and Midwest late in the week, bringing overnight lows in the -10s to 20s. This cold air mass will spread across the country over the weekend, leading to a surge in national demand. In summary, anticipate moderate demand for the next five days, followed by more robust demand over the weekend.
