The Weekly Natural Gas Market Newsletter November 22 2021
The Weekly Natural Gas Market Newsletter
November 22, 2021
Natural Gas News & Notes
December 2021 NYMEX natural gas futures settled for
the week at $5.065, up 27.4 cents. After peaking at a
high of $6.29, after taking over as the prompt month
contract in late October, the December contract has
been in a downtrend reaching a near-term trading low
of $4.71 this week on several occasions but has been
unable to break through that level of support. The lack
of sustained cold weather has been the primary driver
for the contract's weakness over the last few weeks.
For the week ending 11/12, the EIA reported an
injection of 26 BCF. This figure was right in-line with
market estimates. Despite the calendar turning into
November, when the traditional withdrawal season
begins, mild temperatures have allowed storage levels
to continue to modestly build. This week's injection
supplements last week's gain of 7 BCF and storage now
stands at 3,644 BCF. This is 7.8% below year ago levels
and 2.2% below the previous 5-year average. Based on
both weekly production and demand data, it's expected
that for the week of 11/19, the EIA will report the first
storage withdrawal of the season.
LNG daily feedgas demand recently hit a record high of 12 BCF. Global LNG prices have started to surge again with equivalent European gas prices trading at almost $29/DTH and Asian prices at almost $38/BCF. LNG feedgas demand should remain strong based on these prices and an increase in demand is expected as feedgas is now being sent to the startup of the Calcasieu Pass facility and for the addition of Train 6 at the Sabine Pass facility.
The pull back in natural gas prices over the last few
weeks has allowed end-users a last opportunity to
hedge open winter exposure. Prices for cal22 and cal23
remain attractive at existing levels and a long-term risk
management strategy is recommended for these years.