Why natural gas demand is likely to go up

[dan_s]

Take a look at the updated 10-day forecast for Chicago: https://www.wunderground.com/forecast/u ... .88,-87.63

A mild January has created a small surplus of natural gas is U.S. storage, but it is not a "glut" nor has it changed the fact that demand for U.S. natural gas will go up 3X faster than global demand for oil. The weather pattern has changed with the dip in the jet stream now east of the Rockies. The door for cold air moving deep into the eastern U.S. is now open.

In addition to a colder than normal February, getting the Freeport LNG export facility back online should firm up HH natural gas prices.
My forecast models are based on HH natural gas looking something like like this during 2023:
> $3.25 in Q1
> $3.75 in Q2 < storage at 3/31 should be less than 200 Bcf above the 5-year average of 1,540 Bcf. See note below.
> $4.50 in Q3
> $4.50 in Q4
> $4.00 average for the year

Note that U.S. natural gas prices NEVER go up or down in a straight line. The Paper Traders create wild swings in the gas price.

In 2021 we started the storage refill season with 1,784 Bcf in storage and from April 1 to December 31 HH gas traded in a range of $2.10 April to $6.11 in October. My guess is that gas in storage will be within the range of 1,700 to 1,800 Bcf on 4/1/2023.

In 2022 we started the storage refill season with 1,382 Bcf in storage and the refill season began with HH gas at $5.54, ran up to $9.65 in August with lots of volatility in between and ended December at $4.10 (highest price in December 2022 was $6.73 on 12/13. It was the warm weather forecast after Christmas and Freeport remaining offline that caused the gas price to decline into year-end.

A cooler than normal April (slowing refills) and a hot summer (increasing demand for power generation) can also cause some higher prices.