The Weekly Natural Gas Market Newsletter

December 19, 2022

Natural Gas News & Notes

The January 2023 NYMEX natural gas futures contract settled 35.5 cents higher at $6.600 for the week. The contract gapped up 70.5 cents on the open on Monday reaching an intra‐day high of $7.058 after closing at $6.245 on Friday the 9th. Buying in after‐hours trading started last Sunday night as colder‐than‐normal weather forecasts began to be seen on the short‐term temperature outlooks. The contract eventually hit a weekly high of $7.105 before revised weather forecasts showing less cold began to materialize later in the week. The contract lost most of its weekly gains by Friday enroute to an intra‐week low of $6.219 before finding some buyers late Friday afternoon.

For the week ending 12/9, the EIA reported a withdrawal of 50 BCF. This was a slightly lower withdrawal than most analysts had expected. Storage inventories now stand at 3,412 BCF which is .5% below year‐ago levels and .4% below the previous 5‐year average. Early expectations for this week's report are a withdrawal of 80 BCF.

While weather forecasts moderated some as the week progressed, the weather outlooks for this week show the East with its largest shot of cold air thus far this heating season. Much like was seen on the West Coast last week, physical cash prices at many major trading points on the East Coast are likely to see their highest levels since early last January. Transco Zone 5 pricing has already started to rocket up with weekend pricing seen around $20/DTH. While the weather looks to be colder‐ than‐normal thru the Christmas holiday, longer‐term outlooks for the 8‐14 day time period show this cold air moving out almost as quickly as it comes in potentially limiting the duration of the surge in cash prices in the East.