ng daily market
Posted: Mon Feb 13, 2023 9:53 am
https://www.nrg.com/assets/daily-market ... update.pdf
Despite last week’s stronger-than-expected injection of 217 Bcf,
the storage outlook remains bearish for the next few weeks as
end-of-winter storage levels are projected to be ~1.9 Tcf. This
would represent the highest level of natural gas storage coming
out of winter since spring 2020, when storage exited at 2.0 Tcf,
but not near the exit of 2016, where storage levels ended at 2.46
Tcf. What made 2016 special? According to NOAA, Dec 2015 –
Feb 2016 was the warmest period on record in the U.S. for those
three winter months, and prices reacted accordingly, with the
March 2016 prompt settling at $1.711/MMBtu. Today’s market is
seeing similarities with above-normal temperatures (January 2023
was 6th warmest) pushing heating demand lower and near record
-setting production allowing supply to outpace demand. The
NYMEX natural gas 12-month strip price best reflects the market
change, being down 44% since 10/1/22 to end Friday’s trading at
$3.277/MMBtu. Wary of how fast the NYMEX rallied last summer,
market participants will be on the lookout for below-normal
temperatures this spring, slowing production, and growing exports
for anything that could push prices higher over the coming
months.
Despite last week’s stronger-than-expected injection of 217 Bcf,
the storage outlook remains bearish for the next few weeks as
end-of-winter storage levels are projected to be ~1.9 Tcf. This
would represent the highest level of natural gas storage coming
out of winter since spring 2020, when storage exited at 2.0 Tcf,
but not near the exit of 2016, where storage levels ended at 2.46
Tcf. What made 2016 special? According to NOAA, Dec 2015 –
Feb 2016 was the warmest period on record in the U.S. for those
three winter months, and prices reacted accordingly, with the
March 2016 prompt settling at $1.711/MMBtu. Today’s market is
seeing similarities with above-normal temperatures (January 2023
was 6th warmest) pushing heating demand lower and near record
-setting production allowing supply to outpace demand. The
NYMEX natural gas 12-month strip price best reflects the market
change, being down 44% since 10/1/22 to end Friday’s trading at
$3.277/MMBtu. Wary of how fast the NYMEX rallied last summer,
market participants will be on the lookout for below-normal
temperatures this spring, slowing production, and growing exports
for anything that could push prices higher over the coming
months.