a snowy landscape with trees


The Weekly Natural Gas Market Newsletter January 2, 2023

The Weekly Natural Gas Market Newsletter

January 2, 2023

Natural Gas News & Notes

The January 2023 NYMEX natural gas futures contract expired at $4.709 on Wednesday. This is the lowest NYMEX expiration price seen since the March 2022 contract expired at $4.468. Despite most of the US experiencing an extreme cold weather event before the Christmas holiday, the January contract was pressured lower due to the extreme warm‐up that the country is now experiencing. The February 2023 contract has now taken over as the prompt month contract.

For the week ending 12/23, the EIA reported a withdrawal of 213 BCF. This is a larger withdrawal than most analysts had expected. Storage inventories now stand at 3,112 BCF which is 4.1% below last year's level and 2.7% below the previous 5‐year average. This report covered the reporting week the occurred at the beginning of the extreme cold event that most of the country started to experience before the Christmas holiday. This week's report for the week ending 12/30 is expected to show a withdrawal above the 240 BCF level.

In addition to warmer weather in the near‐term weather outlooks, the market is also looking at yet another delay to the restart of the Freeport LNG facility. The facility announced on 12/23 that the restart is likely to occur now in mid‐January which will add some additional near‐term price pressure to natural gas prices. The facility had originally been expected to return to service in early Q4. With a combination of bearish weather and bearish fundamental data, the path of least resistance for the February NYMEX contract in the short‐term looks lower. The contract has the potential to push to the low or even sub $4.00 level in the coming weeks.