Widespread heat that has lingered well into the beginning of the traditional fall shoulder season has kept natural gas prices propped up and sent nearby futures to 20-month highs. After not surpassing the psychologically-important $3 level for well more than a year, the prompt-month NYMEX natural gas market breached this benchmark in mid-September on the back of an unseasonable cooling load in populous markets in the eastern half of the country. What had already been a record season for natural gas usage from the power generation sector was extended into the beginning of fall, with summer-like temperatures forecast across most of the country through at least early October.
The supportive weather, along with other bullish elements of the fundamental balance, has altered market participants&rsquo; views of the coming winter as well. A year ago, production growth still was relatively strong and storage inventories were on track to enter the winter season at record levels. While inventories today remain historically strong, it appears a foregone conclusion that the end-of-summer storage peak will fall shy of the 2015 record. Meanwhile, exports have shown significant year-on-year growth and domestic production has shown declines since the first quarter. As a result, average NYMEX pricing for the coming winter sits near $3.30 per MMBtu, compared to winter 2015-'16 prices 12 months ago well south of $3 per MMBtu.
Forecasts for the winter are mixed, and it remains too early to draw any firm conclusions about the extent of heating load. However, it is a safe assumption that demand will be higher than the historically-mild 2015-&lsquo;16 season. This has contributed to expectations for strong storage withdrawals that could potentially leave inventories near the lower end of the five-year range as the market enters the 2017 injection season.&nbsp;
<table border="0" cellspacing="0" cellpadding="0" width="304">
<tbody>
<tr>
<td width="95">
LOCATION
</td>
<td width="69">
21-Sep-16
</td>
<td width="71">
24-Aug-16
</td>
<td width="69">
22-Sep-15
</td>
</tr>
<tr>
<td width="95">
NYMEX
</td>
<td width="69">
$3.057
</td>
<td width="71">
$2.749
</td>
<td width="69">
$2.577
</td>
</tr>
<tr>
<td width="95">
NNG Ventura
</td>
<td width="69">
$3.015
</td>
<td width="71">
$2.560
</td>
<td width="69">
$2.615
</td>
</tr>
<tr>
<td width="95">
Calif. Citygate
</td>
<td width="69">
$3.090
</td>
<td width="71">
$2.765
</td>
<td width="69">
$2.885
</td>
</tr>
</tbody>
</table>

2016/09/naturalGAS_14746367769737_largethumb.jpg

2016/09/naturalGAS_14746367769737_thumb.jpg

2016/09/naturalGAS_14746367769737.jpg

Widespread heat that has lingered well into the beginning of the traditional fall shoulder season has kept natural gas prices propped up and sent nearby futures to 20-month highs.

Long, hot summer buoys natural gas prices

Related Stories

EIA reduces 2025 production forecasts for SAF and renewable diesel in June STEO

USDA: US biodiesel imports continue to fall in April

Iowa Biodiesel Board and Iowa Soybean Association celebrate B99 biodiesel expansion with Pilot, PepsiCo

Fueling Canadian Decarbonization

Ready to Bounce Back

Upcoming Events

North American SAF Conference & Expo

Long, hot summer buoys natural gas prices.css-7jxktu{position:absolute;bottom:0px;left:0px;right:0px;height:3px;border-radius:3px;background-color:var(--chakra-colors-brandBlack);}