Gas Comparative Inventory

Natural gas futures spreads suggest a more optimistic price outlook than front-month prices.

Degree day and consumption data suggest a lower-than-normal withdrawal and a C.I. increase in next week’s gas storage report.

I expect a slightly lower-than-normal natural gas withdrawal in next week’s storage report, and a smaller increase in C.I.

I expect another lower-than-normal gas storage withdrawal and an C.I. increase in next week’s. I expect C.I. to increase more than it did this week.

The collapse in gas prices appears to be over. Both futures and spot prices are increasing toward $3.00 per mmBtu.

The collapse in gas prices still appears to have found a temporary bottom at about $2.40 as prices have moved back to the 20-day average for the first time since December 2022.

The market has re-priced natural gas to a yield curve with about a $1.00 lower mid-cycle price than has described price-volume relationships since the Ukraine invasion.

Markets continue to discount gas as the price fell below $2.50 for the first time since early April 2021. Forecasts suggest normal to warmer-than-normal temperatures through the middle of February.

Forecasts suggest a cooler early February so I expect prices to increase somewhat. I suspect that price will remain discounted by at least 10% below the implied clearing price of $3.80.

U.S. LNG exports increased 600 mmcf/d to 12.3 bcf/d and Mexico exports rose 500 mmcf/d to 5.4 bcf/d.