Weather Forecast Uncertainties Continue to Pressure Gas Prices

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Natural gas storage inventories decreased by 69 Bcf for the week ended Dec. 8, per EIA. The report was bearish and extended the losses in natural gas prices following the EIA release. The Jan18 futures contract is down $0.05 to $2.67 per MMBtu, at time of writing.

Weather forecast uncertainties continue to put downward pressure on prices this week and have now added to a total ~$0.65 per MMBtu drop in gas prices in the past four weeks.

Working gas storage inventories dropped to 3.626 Tcf, level 201 Bcf below last year 36 Bcf below the 5-year average.

See chart below for projections of end-of-season storage inventories as of April 1, the end of the withdrawal season.

Weather Forecast Uncertainties Continue to Pressure Gas Prices

This Week In Fundamentals

The summary below is based on PointLogic’s flow data and DI analysis for the week ending 12/14.

  • Supply: dry gas production is up 150 MMcf/d recovering some of the losses from last week. Canadian imports are up 660 MMcf/d.
  • Demand: cold temperatures push demand higher again this week, up 13.7 Bcf/d with total demand reaching a 3-digit average (106 Bcf/d) for the first time this winter. All sectors reported weekly gains led by res/com which increased by 12.2 Bcf/d
  • Total supply is up 880 MMcf/d to 82.4 Bcf/d. Total demand increased 13.7 Bcf/d to 106.4 Bcf/d. Market is significantly shorter this week, therefore expect the first 100+ Bcf draw in next week’s storage report.
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