Natural Gas – Week In Review
Natural gas report week, December 23, 2021 saw the overall storage deficit to the five-year average erased with a withdrawal of 55 Bcf. Decreased consumption for heating, forecasts for mild temperatures, power generation demand offsets from increased wind generation, and retreating European markets contributed to a drop in domestic natural gas futures this morning.
Without a shift toward colder temperatures, it will likely be a calm close to an otherwise volatile year for the natural gas market.
Natural Gas Markets
A few key factors worked to erase the gains posted earlier this week.
– Storage. This week’s withdrawal of 55 Bcf was small by historical standards. Comparatively, the five-year average of withdrawals is 153 Bcf. Likewise, last year’s draw is 147 Bcf. Ultimately, it meant storage levels in excess of the five-year average by 34 Bcf.
– Wind. Increased wind generation offset natural gas demand for use in power generation which contributed to this week’s bearish storage totals.
– Weather. Even with normal December-ish weather, there’s still a drop in overall heating degree days over what’s typical for this time of year. Current projections expect this winter to be one of the warmest since the 1950s.
– Europe. Even though record-high LNG exports represent a bullish force on prices, easing pronounced concern over European storage shortfalls calmed skyrocketing international markets which in turn stalled upward price movement domestically.
Natural Gas Futures Quick Look
FEB22, settled at $3.860/Dth, up 9.9 cents
MAR22, settled at $3.713/Dth up 4.5 cents
APR22, settled at $3.635/Dth up 3.3 cents
MAY22, settled at $3.649/Dth up 3.5 cents
JUN22, settled at $3.697/Dth up 3.7 cents
Natural Gas Market Report – December 23, 2021
Settled Wednesday at $3.976/Dth, up 10.7 cents from Tuesday’s close at $3.869/Dth and 17.4 cents from the prior week.
12 Month Strip
Settled Wednesday at $3.794/Dth, up 5.6 cents from the prior week.
The winter strip (JAN22-MAR22) settled Wednesday at $3.850/Dth, up 10.6 cents from the week prior. The summer strip (APR22-OCT22) settled Wednesday at $3.719/Dth, up 3.7 cents from the week prior.
Calendar Years 2022/2023/2024
CY22 settled Wednesday at $3.794/Dth, up 5.6 cents from the prior week.
CY23 settled Wednesday at $3.413/Dth, up 1.6 cents from the prior week.
CY24 settled Wednesday at $3.203/Dth, up 2.3 cents from the prior week.
Settled Thursday at $72.76/barrel, up $2.10 from the prior week.
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