The Weekly Natural Gas Market Newsletter February 6, 2023
The Weekly Natural Gas Market Newsletter
February 6, 2023
Natural Gas News & Notes
The March 2023 NYMEX natural gas futures contract closed 43.9 cents lower on the week at $2.41. The contract gapped down on the open Monday morning and closed lower in 4 of the 5 trading sessions during the week. The contract traded in a 44‐cent range posting a high of $2.78 and a low of $2.34. The $2.34 print is the lowest price seen for a prompt month futures contract since April 2021.
For the week ending 1/27, the EIA reported a withdrawal of 151 BCF. This is a slightly larger withdrawal than the 141 BCF that most analysts had expected. Storage inventories are now at 2,583 BCF which is 9.4% above last year's level and 6.7% above the previous 5‐year average. The weekly report also included a revision to the previous week's report where 5 BCF was added back into the total storage figure. Early estimates for next week's report indicate a withdrawal in the 170 BCF range.
There hasn't been much bullish news to report on
for NYMEX natural gas futures prices over the last 8
weeks. While there have been outbreaks of
extreme cold temperatures events in different
regions of the country, like parts of the Northeast
are currently experiencing, these outbreaks have
been short‐lived. While these extreme cold events
have had a major impact on driving daily physical
cash prices for natural gas to record high levels for a
few days, they've failed to materialize into any
sustained heating demand. There's now clearly an
oversupply situation occurring in the market. The
near‐term fundamentals have flipped from a market
that once looked very tight to one that looks very
loose. With supply currently outpacing demand, it's
possible that natural gas futures could see additional
near‐term weakness with a test of the $2.00 level a
real possibility in the coming weeks.