The Weekly Natural Gas Market Newsletter November 28, 2022
The Weekly Natural Gas Market Newsletter
November 28, 2022
Natural Gas News & Notes
The December NYMEX natural gas futures contract settled 65.5 cents higher at $7.024. The contract traded in a $1.17 range posting a high of $7.316 and a low of $6.145. The weekly gains were driven by some mildly bullish weather forecasts and some bullish technical indicators. The combination of these bullish price indicators and thin trading both ahead and the day after the Thanksgiving holiday provided the catalyst needed for the December contact to clos ethe trading week at its highest level since mid‐October.
For the week ending 11/18, the EIA reported a withdrawal of 80 BCF. This was the first weekly withdrawal of the winter heating season and was slightly larger than most analysts had predicted. Storage inventories are now at 3,564 BCF which is 1.7% below year ago levels and 1.1% below the previous 5‐year average. Early estimates for next week's report indicate a withdrawal around 105 BCF.
The December NYMEX contract heads into
expiration on Monday. Despite the run‐up in prices
this week, it's very likely that the contract will expire
lower, perhaps even close to its 10 and 40 day
moving average prices of $6.46 and $6.42
respectively. These prices should provide some very
solid levels of support should the contract trade
down to these areas. Once the December contract
is off the board, traders will then begin to focus on
the January 2023 contract month. One of the
biggest drivers of pricing for the January contract is
the expected return of the Freeport LNG facility.
The facility plans to restart gas liquefaction in
December with the expectation of being at full
export capacity of 2 BCF/day by month's end.