The Weekly Natural Gas Market Newsletter

October 10, 2022

Natural Gas News & Notes

The November NYMEX natural gas futures contract settled 1.8 cents lower on the week at $6.748. The contract traded in an 88-cent range with a high of $7.19 and a low of $6.31. The contract saw an almost 50 cent drop on Monday from its open of $6.80 to the intra-week low of $6.31. Value buyers were quick to rush in with the contract at its lowest level since early June. The November contract was also displaying a technically oversold condition after the last few weeks of downwards price pressure took the contract from highs at the $10.00 level, so a bounce higher had been expected.

For the week ending 9/30, the EIA reported an injection of 129 BCF. This was a slightly larger injection then had been expected and gas storage levels are now at 3,106 BCF which is 5.0% below year ago levels and 7.8% below the previous 5-year average. Improvements to storage over the last few weeks has been a major contributor of the recent market weakness. With 4 weeks left in the traditional injection season, inventory levels have the potential to be around 3,500-3,600 BCF which would be exponentially better than levels were forecasted to be at near the start of summer.

Daily natural gas production averaged over 102 BCF/day this week with a new record high of 103.6 BCF seen on 10/3. With production expected to continue to grow more in the coming weeks and with winter weather likely still a few weeks away, the natural gas market looks poised to continue its downwards trend with the possibility of seeing the November contract trade in the upper $5.00 range and the winter strip (Nov22-Mar23) trade below $6.00. For customers looking to manage risk, buying at these levels, if seen, is strongly recommended.