Natural Gas Market Update – 02/17/2017

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Storage Report – 02/17/2017

Thursday’s storage report cited a withdrawal of 114 Bcf, less than expectations of a 128 Bcf withdrawal. As a comparison, last year’s withdrawal for the same week was 136 Bcf, and the 5-year average reduction is 156 Bcf.

Working gas in storage was 2,445 Bcf as of Friday, February 10th, 2017, according to EIA estimates. Inventory was reported at 303 Bcf (-11.0%) less than last year at this time, and 87 Bcf (3.7%) above the 5-year average of 2,358 Bcf.

Natural Gas Trends:

March NYMEX: Trading closed Thursday at $2.854/Dth, down 7.1 cents from Wednesday’s close of $2.925. Over the last month, MAR17 has traded as high as $3.498/Dth and as low as $2.831/Dth.

Seasonal Strips:

This current summer strip (APR17-OCT17) settled Thursday’s trading at $3.122/Dth, down 21.3 cents from a week ago. This coming year’s winter strip (NOV17-MAR18) settled Thursday at $3.379/Dth down 19.3 from last week.

12 Month Strip: Settled Thursday at $3.187/Dth, down 30.9 cents from the month prior. As a comparison, the strip was trading one year ago at $2.267/Dth.

Summary:

The natural gas market has been under pressure over the past few days, as cold air exits the Northeast, and spring like temperatures expected to move in through Presidents Day. Most of the country will see temperatures well above average for mid-February (15-30 degrees above). There are some indications that the warmth may even continue through most of next week.

With the weak demand for natural gas, March NYMEX finally broke through the $3.00 support level on Monday, and has continued to steadily tumble since. The bearish storage report sank the prompt month price an additional 8 cents on Thursday. March 2017 may not roll off the board at last year’s settlement of $1.711/Dth, but if the warmth continues, the floor on natural gas prices may continue to fall.

 

Natural Gas Market Update – 02/17/2017