The Weekly Natural Gas Market Newsletter February 28, 2022
THE WEEKLY NATURAL GAS MARKET NEWSLETTER
FEBRUARY 28, 2022
NATURAL GAS NEWS & NOTES
For the week ending 2/25, the new prompt month April
2022 NYMEX natural gas futures contract settled 4 cents
higher at $4.47. March 2022 futures expired at $4.568
on Thursday. The March contract experienced
extremely volatile trading when it took over as the
prompt month contract on 1/27. The contract saw a
high of $5.537 and a low of $3.886. The now prompt
April contract will likely resume extremely volatile
trading conditions over the course of the next few
weeks.
The weekly EIA storage report showed a withdrawal of
129 BCF. This was a bit larger than most analyst
expectations of a withdrawal closer to 126 BCF. Storage
inventories are now 10.5% below last year's level and
10.7 BCF below the previous 5-year average. The early
estimate for next week's storage report for the week
ending 2/25 is a withdrawal of 125 BCF.
Global energy markets were rattled on Thursday with
Russia's invasion of Ukraine. WTI crude oil prices spiked
to over $100/BBL and the newly prompt April natural
gas contract soared to $4.94. By the close of trading on
Friday, energy commodity markets had calmed down
and returned to "pre-invasion" levels. Domestically, the
situation in the Ukraine shouldn't impact US markets
directly. While the US is dependent on Russia oil
exports to some degree, those volumes can be replaced
within the global market. Eastern Europe has a far
bigger worry in that Russia supplies over 30% of the
natural gas volumes to the region. The new Nord
Stream 2 gas pipeline that was set to start flowing gas
from Russia to Germany this year has been part of the
sanctions rolled out by many nations. Should Russia
decide to use their energy supplies as a "political"
weapon by withholding supplies to European countries,
that could spell trouble for many nations already
ravaged by extremely high energy prices. From a US
standpoint, this only reinforces the notion that exports
of LNG to Europe will remain very strong in 2022.
