The Weekly Natural Gas Market Newsletter

October 25, 2021

Natural Gas News & Notes

November 2021 NYMEX natural gas settled down 13 cents on the week at $5.28 marking the 2nd straight week of declines for the prompt month contract. The November contract gapped lower on the open on Monday morning, trading down 11 cents from the previous weekly close and eventually traded down to a low of $4.825 by Tuesday. The contract found buyers at this level and rallied to a weekly high of $5.38 before losing some steam heading into the close on Friday.

For the week ending 10/15, the EIA reported a storage injection of 92 BCF. This was slightly larger than most analyst's expectations of an injection in the high 80 BCF range. Storage inventories are now 11.7% BCF lower than last year and 4.2% lower than the previous 5-year average. With cooler weather failing to make an early appearance in most major consuming regions, storage inventories have improved over the last few weeks. With two reporting weeks left in the traditional injection season, storage inventories are poised to be at 3.6-3.7 BCF for the upcoming heating season.

LNG export demand remains strong as global natural gas prices are still trading at a very large premium to US natural gas prices. Prices in Asia were last seen at $33/DTH and in Europe at $30/DTH. Some unplanned maintenance issues at the Sabine Pass and Freeport export facilities have reduced total LNG feedgas demand down to about 10.2 BCF/d from over 11 BCF/d seen last week. Maintenance will be monitored to see when these facilities ramp back up to full production.

November futures will expire this week on Wednesday. Short-term weather forecasts for how the next two weeks will look will play a big role in determining the final settlement price. Buying on market dips to cover open winter 2021/2022 and longer dated needs is advised at this time.