Natural Gas Prices - Dec 14

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dan_s
Posts: 34465
Joined: Fri Apr 23, 2010 8:22 am

Natural Gas Prices - Dec 14

Post by dan_s »

Why is the price of natural gas down today?

"As of 2:00 PM ET on December 14, the population-weighted nationwide temperature is 54.9°F which is 1.2°F warmer than yesterday and 7.3°F warmer than the historical average. Accumulated Natural Gas-Weighted Degree Days (GWDDs) through 2:00 PM EDT tally 18.1 GWDDs which is 1.8 GWDDs less than yesterday through the same time and 9.3 GWDDs less than average. This suggests a below-average contribution of temperature to natural gas demand." from http://www.celsiusenergy.net/p/intraday-weather.html

The price you see for natural gas is the front month NYMEX futures contract, which today is January. Natural gas futures are much more thinly traded than oil futures contracts, so a change in the weather forecasts can have a significant impact on the contract. Mild weather is now expected for ten days. Should turn colder than normal on Christmas Eve.

Natural gas in storage is still dangerously low for this time of year and winter is just getting started.
Dan Steffens
Energy Prospectus Group
dan_s
Posts: 34465
Joined: Fri Apr 23, 2010 8:22 am

Re: Natural Gas Prices - Dec 14

Post by dan_s »

Go to this link https://www.macrotrends.net/2478/natura ... ical-chart and you will see that Henry Hub natural gas price peaked in January, 2014 at $5.43/MMBtu.

On December 31, 2013 there was approximately 2,900 Bcf in U.S. storage.
On December 31, 2018 there will be approximately 2,600 Bcf in U.S. storage PLUS the U.S. gas market I much larger than it was five years ago. We had no LNG shipments sailing from the U.S in Q1 2014 and we had a lot more coal fired power plants.
This is why I still think we see $5.00 HH gas in Q1 2019.
Dan Steffens
Energy Prospectus Group
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