TPI Market Snapshot header
<em>TPI Market Snapshot Monday October 16 2023<em>

Oil, Natural Gas, and The Israel-Hamas Conflict

After worries that the Israel-Hamas conflict could widen into a larger Mideast war, prices returned to normal. So far, the fighting has been limited to around the Gaza Strip except for a few rocket attacks from Hezbollah from Syria and Lebanon in the north. While neither Israel nor Palestine has enormous oil reserves, the threat of a widening conflict could draw in large oil producers such as Egypt, Saudia Arabia, etc.

EIA: WEEKLY NATURAL GAS STORAGE

EIA Natural gas storage report

According to the EIA, gas injections continue to be weak this summer, and we will still be lucky to have a surplus by the withdrawal season starting in November. Our surplus over the 5-year average, at one time over 17%, is now down to 4.8%. The excess over last year has plummeted to just 9.8%

With the warming temperatures we have experienced in the last ten years, the shoulder months have moved closer to October-November instead of September-October. This decline in demand helped push down on natural gas pricing despite lower-than-expected natural gas injections.

Weather Forecast: 6-10 DAY AND 8-14 DAY OUTLOOK

US Weather Map

A weather system is expected to persist in the Great Lakes and East from Monday to Wednesday, with temperatures ranging from the upper 40s to low 60s. Meanwhile, the rest of the United States will experience comfortable temperatures, ranging from the 60s to 80s, except for the hotter 90s in the Southwest.

As we move towards Thursday and Friday, much of the country will warm up to near or above normal temperatures, with highs in the 50s to 70s in the northern US and 60s to 80s in the southern US. However, a cooler system will move through the Great Lakes and Northeast next weekend, bringing highs in the 40s to 50s. Overall, there will be moderate to seasonal demand for the next two days, followed by lighter conditions.

NATURAL GAS PRODUCTION REMAINS NEAR RECORD LEVELS

natural as production levels


Production of Natural Gas has set new records this year and remains at just over 102 Bcf/d. This number has been virtually unchanged in the last few months. Demand for Natural Gas has also fallen slightly, though exports remain high. LNG exports remain at 13.48 Bcf/d, just shy of the yearly high of 14.9 Bcf on April 16th.

NYMEX 12-MONTH ROLLING STRIP (NOV-OCT)

NYMEX Calendar strips

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.