The Weekly Natural Gas Market Newsletter December 12, 2022
The Weekly Natural Gas Market Newsletter
December 12, 2022
Natural Gas News & Notes
The January 2023 NYMEX natural gas futures contract settled down 3.6 cents on the week at $6.245. The contract traded in a $1.05 range posting a weekly low of $5.34 and a weekly high of $6.39. The $5.34 print marked the lowest price seen on the January contract since early March. Buyers were quick to step in at that level and rally the contract back to its 10‐day moving average of $6.336 before settling slightly lower at the close of trading on Friday.
For the week ending 12/2, the EAI reported a withdrawal of only 21 BCF from storage. Current storage inventories are at 3,462 BCF which is 1.5% below last year's level and 1.6% below the previous 5‐year average. Early expectations for next week's report indicate another smallish withdrawal of only around 45 BCF based on the weekly supply and demand balances.
While cold weather has largely been absent in the
major consuming regions of the East Coast and
Midwest, some well below normal temperatures
have plagued the West Coast this week. This
weather has caused regional cash prices in the
region to skyrocket. PG&E and SoCal Gas citygate
prices traded over $45/DTH. These prices are up
about 52% from where prices were on Thursday,
and they mark the highest prices levels seen for
these major West Coast trading points since
February 2021. The cold weather coupled with
some constraints on the El Paso Pipeline, a key
provider of natural gas supply from the Permian
region to the West Coast, could cause the Pacific
storage region to experience historically high
withdrawals over the next few weekly EIA reporting
periods.
