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.