Natural Gas Price Analysis
Throughout natural gas report week, November 18, 2021, prices continued to slide amid another post-injection season build, yielding a 26 Bcf addition to storage. The bearish market response persisted despite a week-over-week 11.8% (2.9 Bcf/d) increase in heating demand alongside a 1.1 Bcf/d drop in production.
However, international prices are on the rise again on renewed concerns over supply shortages. When this occurred in October, domestic prices also skyrocketed. Is this a sign for long-term price forecasts?
Let’s take a closer look…
UK/European Supply Shortages Drive Prices Higher
As a quick recap, earlier this fall, reports drew attention to the potential for a European energy crisis centering on historically low storage amounts. Prices surged as a result. Then Russia stepped in, promising increased natural gas deliveries which temporarily appeased those concerned it may be a brutal winter. But last week, it started to look like Russia will default on that promise.
This week, that eventuality became more certain and definitively more long-term as Germany suspended approval for the Nord Stream 2, a major pipeline from Russia. According to a report from Reuters, the start of the pipeline could be delayed until March 2022, which has, “raised fears that Europe, which gets a third of its gas from Russia, could face power outages due to low supplies.
European and UK prices have already spiked in response. Absent a change in these recent developments, that trend is likely to continue and if domestic prices mirror their October response, higher prices at home are on the horizon.
JAN22, settled at $4.995/Dth, down 25.0 cents
FEB22, settled at $4.904/Dth, down 21.2 cents
MAR22, settled at $4.671/Dth down 13.1 cents
APR22, settled at $4.019/Dth down 8.5 cents
MAY22, settled at $3.953/Dth down 7.1 cents
JUN22, settled at $3.982/Dth down 6.9 cents
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Natural Gas Market Report – November 18, 2021
December settled Thursday at $4.902/Dth up 8.6 cents from Wednesday’s close at $4.816/Dth, but down 24.7 cents week over week.
12 Month Strip
Settled Thursday at $4.303/Dth, down 11.6 cents from the prior week.
The winter strip (DEC21-MAR22) settled Thursday at $4.868/Dth, down 21.0 cents from the week prior. The summer strip (APR22-OCT22) settled Thursday at $4.007/Dth, down 7.0 cents from the week prior.
Calendar Years 2022/2023/2024
CY22 settled Thursday at $4.252/Dth, down 10.0 cents from the prior week.
CY23 settled Thursday at $3.539/Dth, down 3.5 cents from the prior week.
CY24 settled Thursday at $3.232/Dth, up less than a penny from the prior week.
Prices Have You Uneasy?
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We’ll evaluate your current contract and explore your natural gas buying options.
Call us at 866-646-7322 for a no-cost, no-obligation analysis today.