Welcome to RiteRate’s Natural Gas Market Update Archive, your database for all of our past posts. If you’ve missed anything over the past few weeks, fell free to come here at any time to catch up or reference. In the case of any additional questions on any of our content or offerings, send us an email at service@riterate.ca or give us a ring at (416) 862-0322. Happy reading!
September 28th, 2022 – Natural Gas Market Update | Markets were up $0.36 US/MMBtu retracing back to last Friday’s close. It appears the markets continue to remain range bound until we start to realize additional demand. The European markets remain on edge with the Nord Stream pipeline disruptions that could have longer term affects this winter. Take care! (RS)
September 27th, 2022 – Natural Gas Market Update | Natural gas was down 0.22 on the day with tomorrow the final day of options trading which will offer some insight to the end of month activity. Russia’s Nord Stream pipe is down for repairs after a leak was reported today. This could cause issues for the upcoming European winter gas markets. (RS)
September 23rd, 2022 – Natural Gas Market Update | Natural gas continued to fall today with Oct22 to Mar23 settling down US$0.178/MMBtu on average. The October and November contracts fell to below $7, a first since July 20th, 2022. Drivers of this continued downward pressure include a mild early October weather forecast and the development of Tropical Depression 9 into a hurricane. It is expected to hit the Gulf of Mexico, which will impact LNG exports, and allow for injections into storage amidst the ongoing shortage concerns. ~CL
September 22nd, 2022 – Natural Gas Market Update | Happy Thursday everyone. Natural gas continued to fall today with the prompt month October NYMEX contract falling US$0.69/MMBtu to settle at $7.089, the lowest it’s been since July 19th, 2022. The U.S. Energy Information Administration’s storage report played a large role today in generating bullish momentum. While the industry estimate came in at 96.3 billion cubic feet (Bcf), the actual amount was recorded at 103 Bcf. Volatility will continue to be present going into winter though as the storage deficit is still quite large to last year and the 5-year average. ~CL
September 21st, 2022 – Natural Gas Market Update | Happy Wednesday everyone. The lack of any new headlines meant that natural gas continued to trade at similar levels to the previous two days. The prompt month October contract settled up US$0.062/MMBtu from yesterday at $7.779. Similar to yesterday, all contracts past March 2023 continued to settle farther down. Hurricane season has officially begun, and although Fiona will miss the U.S., there are five storms currently developing. A lot has changed in natural gas from the early 2000s, and as opposed to old times when hurricanes would decrease production, they now have the opposite effect and will decrease demand that comes from liquefied natural gas facilities for export. ~CL
September 20th, 2022 – Natural Gas Market Update | Prices continued to stay flat today with the prompt month October NYMEX contract settled down US$0.035/MMBtu at $7.717. Not much has changed fundamentally, marking relatively flat trading days especially in comparison to last week’s fluctuations. It is interesting to note that the period past March 2023 settled on average ten cents lower while the winter until then only settled down an average of $0.033. ~CL
September 16th, 2022 – Natural Gas Market Update | What a way to wrap up the week! The prompt month NYMEX contract settled down US$0.56/MMBtu at $7.764 for the day, hitting a new low since mid-last week. Temperatures continue to be confirmed with the most recent runs showing a similar pattern. Following yesterday’s news of a settlement being reached between the White House and the Union, not much is on the horizon for higher prices at the moment. ~CL
September 15th, 2022 – Natural Gas Market Update | Today was a major reversal day for natural gas, with all contracts moving downwards and offsetting yesterday’s moves. The prompt month NYMEX October contract settled down US$0.79/MMBtu at $8.324. The U.S. freight union has reached a tentative agreement, which has allowed for yesterday’s fear of increased natural gas demand and storage deficits to be erased. On the topic of storage, today marked another EIA release. The industry estimate consensus came in at 72 Bcf, but the actual number came in at 77 Bcf for the week ending September 9th, 2022. This resulted in a slight bounce up though until $8.50 until 1PM, but the market ultimately has trended further down. ~CL
September 14th, 2022 – Natural Gas Market Update | Today was moving day in natural gas as the prompt month October NYMEX futures settled up US$0.83/MMBtu to close out the day at $9.114. The move was new to concerns over the U.S. freight negotiations between the Union and the Biden administration. Essentially, if an agreement is not reached, workers would go on strike and shipments of coal would be hindered. If you’re wondering why this affects natural gas, it’s because without coal, power plants would have to utilize more natural gas to generate power and keep the grid running. If this is the case, the natural gas builds meant for injection will not exist, and the storage deficit will widen as oppose to shrink, which ultimately will place strain on this winter. As always, a long chain gets us to the root cause in natural gas, and we won’t know the outcome for sure until Friday. ~CL
September 13th, 2022 – Natural Gas Market Update | Welcome back everyone. Prices continued to trade at yesterday’s levels today, ranging between US$8.155/MMBtu and $8.456. The October prompt month contract ended the day up $0.035 at $8.284. Not much has changed fundamentally, hence no major moves. Temperatures have been shifting cooler than warmer back and forth, and while hurricane season has finally begun, no major storms are cited to yet hit the U.S. Overseas, we are also seeing some relief. While Russian gas concerns are still on the horizon, European storage levels have caught up and sit above the 5-year average. This allows for some pressure to be removed, as seen with falling TTF prices day over day. ~CL
September 12th, 2022 – Natural Gas Market Update | Today marked a rally day as the prompt month October NYMEX contract climbed US$0.253/MMBtu from Friday to settle at $8.249. The move upwards was driven by the return of LNG feedgas demand from the Corpus Christi facility as well as some overseas concerns once again in Europe. ~CL
September 9th, 2022 – Natural Gas Market Update | It was another fairly quiet end to the week today. The prompt month October NYMEX contract traded within a US$0.317/MMBtu range, hitting a high of $8.205, a low of $7.888 and settling at $7.996, which effectively undoes the drop yesterday. On the horizon as we transition from the summer to fall and winter, weather is expected to aid in lessening Lower-48 demand by around billion cubic feet (Bcf), which paired with no reduction in production will look to help narrow the existing storage deficit and ease some pressure of prices. However, other factors are still on the watch, such as hurricanes (currently three developing but not expected to affect the U.S.), LNG (Freeport’s still out and other plants have some maintenance going on), and overall market position (according to analysts, it’s pretty oversold right now, hence the low prices). ~CL
September 8th, 2022 – Natural Gas Market Update | Today’s market is the story of the tortoise and the hare. Prompt market slowly moved back up as we moved through the day. Traders removed profits over the past two days of trading by selling out positions while the market resets back to reality. Production is marginally higher with more supply destined for storage. If we are able to maintain steady injections we could reach reasonable storage levels through the fall. Sad news of the Queens passing; flags are at half mast all over the city. (RS)
September 7th, 2022 – Natural Gas Market Update | Markets continued their slide all day with news of cooler temperatures and supply remaining strong. These price drops are great opportunities to layer in supply transactions on an ongoing basis. Some traders believe we could see more downside tomorrow morning as the market awaits structure on the European price caps the EU are currently proposing. Enjoy! (RS)
September 6th, 2022 – Natural Gas Market Update | Markets were down across the board today as traders start to focus on the upcoming winter weather. The hot weather across the United States has cooled significantly causing the front month futures contracts to drop off another 8% today marking the biggest decline in prices over the past month. It will be interesting to see if this market holds at these levels over the balance of the week. Interesting to note the latter years 2023 and 2024 are actually rising while the more recent contracts are declining. Enjoy the first day back to school for some! (RS)
September 2nd, 2022 – Natural Gas Market Update | Prompt month markets were down 0.61USD/MMBtu at end of the trading day. Prices are down all through the winter of 2022/2023 due to a number of factors. Europe could be able to sustain itself with based on the current inventory, although that could change when we are actually experience winter. Secondly, North American markets are experiencing more production than planned, causing a surplus during the shoulder season. One of our long standing commercial clients noted to me ” when the kids go to school it is time to buy natural gas for the upcoming winter”. Take care and enjoy the long weekend. (RS)
September 1st, 2022 – Natural Gas Market Update | Markets were choppy all day settling $0.04 over the open. It is interesting to note activity be in 2023 are more active as traders are concerned about the outcome of the upcoming winter and the inflation factors. CNN reported more than 20% of residential energy clients are in arrears; a sharp increase from this point last year. Enjoy the dwindling days of summer. (RS)
August 31st, 2022 – Natural Gas Market Update | Markets were somewhat unchanged increasing slightly from yesterdays settlement. Maintenance continues to remain active in the West and Europe at this point of the year. Pundit believe we could still be in a bull market later this winter. (RS)
August 30th, 2022 – Natural Gas Market Update | Markets were softer by $0.31 US/MMBtu at the end of the day for the October 22 futures contract. Today’s decline is based on cooler weather forecasts and decreased LNG exports. September has traditionally been a favourable time to start looking at natural gas hedges as we exit the extreme heat into the future winter cold. Take care. (RS)
August 29th, 2022 – Natural Gas Market Update | We were expecting a relatively volatile day on the markets. Traders were active early in the day selling off the prompt month, bouncing back close to where we opening the trading day. October 22 through to January 2022 are down slightly by $0.13 US/MMBtu for the term. Tomorrow we roll over and start trading the October 2022 futures contracts. This will start to offer some sight lines into the balance of the winter. (RS)
August 26th, 2022 – Natural Gas Market Update | After climbing to a high of US$9.668/MMBtu, prices settled down $0.079 from yesterday at $9.296. The same pattern extended out to March 2023, with month beyond that settling slightly higher instead. As per usual, the contract will look to settle next Monday, August 29th, 2022, so some end of month intraday volatility can be expected. ~CL
August 25th, 2022 – Natural Gas Market Update | Welcome back to a relatively quiet day in natural gas today. The September prompt month NYMEX futures contract traded between US$9.175/MMBtu and $9.419 today, settling out the day +$0.045 at $9.375. As we mentioned yesterday, today was the release of the weekly Lower-48 storage balance report from the U.S. Energy Information Administration (EIA). The industry estimate prior to the 10:30AM came in at an injection of 59 billion cubic feet (Bcf) and the actual number came in almost spot on at 60 Bcf. Since the actual number was 1 Bcf greater than the consensus average, markets had a delayed drop to the low of the day, but recovered shortly after. Outside of North America, prices continue to climb with ongoing cuts from Russia. Europe and Asia prices yesterday settled at $85 and $45 respectively, that’s nearly 10 times what we are seeing here in Europe. With this in mind, liquefied natural gas exports have been hitting highs even without Freeport LNG online, so we can expect greater imports come November when it resumes. All-in-all, the current outlook is a rocky winter, and we still have the rest of summer and fall to go through! Our tip to customers at the moment? Conserve what you can when it’s not needed, and stay up to date with RiteRate. ~CL
August 24th, 2022 – Natural Gas Market Update | Prices continued to traded within a tight range today between a low of US$9.10/MMBtu and a high of $9.455. The day ultimately settled up $0.137 from yesterday at $9.33, but at the time writing, the September prompt month contract returned to $9.21. No new developments since yesterday, so the potential for a hurricane, warmer weather into September, high prices overseas, and low storage continue to loom on the horizon as the most pressing fundamentals. Tomorrow will show a storage number from the U.S. EIA which could swing us in either direction, or keep us flat where we are. At this point, numbers to the downside will play more of a role and lead to even higher prices. ~CL
August 23rd, 2022 – Natural Gas Market Update | Welcome back everyone, today was a pretty exciting day in natural gas. After surpassing US$10/MMBtu today ($10.028) early this morning, the September contract settled $0.487 down from yesterday at $9.193. The catalyst for the reversal? Freeport LNG once again. After previously confirming an October return to service date, the facility released a statement with a revision now to late November. The additional one month will look to have implications on storage, adding around 106 billion cubic feet (Bcf) to inventory which will greatly help the deficit we currently see. In other news, warmer weather is now expected going into September, and hurricane season appears to not be kicking off. Developments are always ongoing, and we’ll make sure to keep you updated on the daily with RiteRate’s market updates. ~CL
August 22nd, 2022 – Natural Gas Market Update | Natural Gas markets are up at the beginning of the week. Traders are viewing this balance of the month NYMEX will break the $10.00 US/MMBtu mark for the winter months. Currently on average for $9.74 US/MMBtu, still a high for this market. Russia announced it will be curtailing production at month end to complete the necessary maintenance pushing European price to $75.00. Some European manufacturing is being curtailed due to the high energy costs. We will see how the week unfolds. (RS)
August 19th, 2022 – Natural Gas Market Update | Natural Gas markets rebounded today up 6.3% mostly through the winter months and 4% for the balance of the term. Trading volume was moderate throughout the day which demonstrates market sentiment. These types of upward momentum appears to be cyclical with the intent to ever so slowly move this market up. Market fundamentals remain the same. We will see more activity over the balance of the next few weeks to see if this holds or retracts. Take care. (RS)
August 18th, 2022 – Natural Gas Market Update | Natural Gas markets were all over the place. Another weak storage injection leaving the winter inventory less than last years balance. Markets rallied all day up and then returned close to the Wednesday settlement. Maintenance outages and a cool 14 day weather forecast are on the minds of energy traders. Traders are looking at the winter of 2022/23 and beyond as we move into tight supply. Take care. (RS)
August 17th, 2022 – Natural Gas Market Update | The markets are taking a pause today as we await tomorrow EIA storage report. Some minor movement although relatively flat throughout the day. Once we are well into November will we be able to assess how the supply will affect the price and subsequent demand. Another hot day in the city. (RS)
August 16th, 2022 – Natural Gas Market Update | The markets must be having a catch up day rising on average $0.51USD/MMBtu through the curve to October 2023. The main reasons are early indications of a colder than normal winter across North America. With the lack of storage inventory combined with increased international demand the markets are reacting accordingly. In one of our previous posts, we noted the the NYMEX will climb to $10.00 US/MMBtu before the winter of 2022/2023. We are about $0.60 US/MMBtu away from that target today. (RS)
August 15th, 2022 – Natural Gas Market Update | Not much action over the weekend. Markets were choppy all day finishing within the opening range. Weather and storage remain the trends to observe over the next two weeks prior to the close of the September 2022 contract. Enjoy the sun! (RS)
August 12th, 2022 – Natural Gas Market Update | Natural gas prices came down a tad to round off the week with the prompt month September NYMEX futures contract settling US$0.106/MMBtu down from yesterday at $8.768. With the recent Freeport and Gulf of Mexico news, the bulls have been able to take the reins once again as we look to round out the summer months. Enjoy the weather while you can this weekend, and we’ll catch up with more news on Monday. ~CL
August 11th, 2022 – Natural Gas Market Update | Markets were up all day today finishing up 4.7 percent through until March 2024. The storage injections was lighter than expected mainly due to the heat that continue to blanket North America. We will need some heat relief and strong production over the next 8 weeks to catch up with the projected winter demand. The winter of 2022/2023 could be interesting. Take care (RS)
August 10th, 2022 – Natural Gas Market Update | Happy middle of the week, markets were more exciting today. A lot of speculation that the market is overly short given the move upwards by all contracts. The September prompt month NYMEX contract settled up US$0.369/MMBtu at $8.202 to return it to levels seen post-storage report last Thursday. Prices rose an average $0.199 out to March 2024. Fundamentally, not much has changed, and any changes were more so bearish. For example, the previously reported storm has quieted down and is not expected to develop over the next couple of days. There are a lot of moving parts involved though, and the storage report tomorrow may add some further volatility depending on the existing trader sentiment. ~CL
August 9th, 2022 – Natural Gas Market Update | Another quiet day in natural gas. It must be Tuesday and the markets rallied once again up more than 3% on the day right through into 2023. It appears Mondays and Fridays markets sell off then rebound the balance of the week. Markets continue to monitor heat demand and keeping an eye on the first tropical storm capable of hitting the South East. (RS)
August 8th, 2022 – Natural Gas Market Update | Another quiet day in natural gas. Hot weather persists all week long although the Natural Gas markets were not reacting at this point down 5%. Trading is relatively light and will perhaps remain choppy for the balance of the month while we await more data on the winter. Early estimates are declaring a colder than normal winter for the North East. This appears to be a normal pattern when we have sustained heat through the summer months. Take care. (RS)
August 5th, 2022 – Natural Gas Market Update | Another quiet day in natural gas. The September prompt month contract traded between a range of US$7.898/MMBtu and $8.248 for the day, ultimately settling down $0.058 at $8.064. As per usual, we saw a climb upwards before noon followed by a reversal afterwards, signalling some day trading action as we wrap up the week. Hot weather continues to persist, but it should look to cool down soon. Have a lovely weekend, and we’ll be back on Monday! ~CL
August 4th, 2022 – Natural Gas Market Update | Natural gas traded sideways to lower today, finishing down by 1.67%. Details of the Freeport LNG restart remained somewhat murky, materializing as more broken telephone chatter than fact-based information. Natural gas traders seemed more focused on storage data today which happened to surprise to the upside with a reported injection of 41 bcf compared to an average analyst projection of 32.9 bcf. While all eyes were on WTI as it continued to lose ground, falling 2.51% to $88.35, a level not seen since February 9th, 2022.
August 3rd, 2022 – Natural Gas Market Update | Natural gas reversed course from the previous day, recapturing all of yesterdays losses, finishing up by just over 7%, and finishing above the $8 mark with conviction. Early morning trade was quiet and trendy, as the bearishness of a cooler weather forecast faded. Late in the day, Freeport LNG advised the market that they would resume production at their facility effective October 22, 2022. Production would resume stronger than anticipated and given the spread to European prices, the market saw this as bullish. (AC)
August 2nd, 2022 – Natural Gas Market Update | Welcome back everyone, hope a restful long weekend was enjoyed by all. Natural gas saw red across the board today with the prompt month September NYMEX contract settling the day down US$0.577/MMBtu at $7.706. Much of the pricing relief came from the cooler weather expected to come around the 10th of the month, retracing below the 10-year normal. This will look to take off on average 6 Bcf/d for the week ending August 19th, 2022, providing some relief in the market tightness. Overseas, prices in Europe and Asia continue to trade above $50, highlight the growing gap and potential for higher prices domestically. ~CL
July 29th, 2022 -Natural Gas Market Update | Happy Friday, as we approach the long weekend, we’re looking to wrap up a little bit earlier, so here’s a quick one! Not much activity today in terms of excitement. The September contract traded between US$8/MMBtu and $8.40 roughly, just bouncing up and down throughout. Fundamental are still fairly consistent, with weather being hot next week, so without any further news, prices should hold at these levels. We hope everyone has a safe and restful holiday! ~CL
July 28th, 2022 – Natural Gas Market Update | Today marked the first day of the September contract trading as the prompt month NYMEX futures. As per usual, the first few days are relatively quiet, with the exception of the U.S. Energy Information Administration’s storage report at 10:30AM. While the estimate was around 19 billion cubic feet (Bcf), the actual injection was only 15 Bcf, signalling the impact of hotter weather and power generation demand. Following this news, the market peaked at a high of US$8.845/MMBtu. The bullish news was ultimately not enough to support prices though as the day settled down $0.42 at $8.134. Tomorrow will most likely be another quiet day, but in the case of any news, we’ll be sure to have you covered! ~CL
July 27th, 2022 – Natural Gas Market Update | Today marked the last day of August trading as the prompt month NYMEX contract. As per usual, we saw quite a bit of volatility. Prices traded within a US$0.651/MMBtu range today, with a low of $8.487 and a high of $9.138. For the majority of the day, prices trended downwards, but we saw a bounce of the low at around 2PM with prices climbing into the final settlement of the August contract. Asides from trading volatility, fundamentals stayed fairly consistent Weather is expected to remain hot heading into August, with the week ending August 12th expected to be as hot as last week. Other news to watch out for would be European and Asian gas prices as Russia cuts off much needed supply. September 2022 prices hit $60 and $40 in the two markets respectively. Tomorrow will mark another storage report from the U.S. Energy Information Administration. Many analysts are expecting an injection in the 10s, which signifies extreme tightness, especially when made weather relative. Make sure to join us again tomorrow to catch-up on what’s happening in natural gas. ~CL
July 26th, 2022 – Natural Gas Market Update | Settlement – Today marked the second last trading day of the August contract as the NYMEX prompt month and it was packed with excitement. Shortly before 8:30AM EST this morning, prices rallied to a high of US$9.752, which is $0.759 up from yesterday’s settle. The overall trading range spanned over $1, highlighting the volatility that can happen within a day. The good news though is that prices continued to trend downwards after the peak, as opposed to oscillating within the range. Fundamentals – A couple of factors asides from traders trying to make some intraday gains can be attributed to pricing today. For one, yesterday’s drop in LNG feedgas demand at Sabine Pass was a false alarm, and not foreshadowing of maintenance as volumes recovered this morning. The most recent weather revision has hotter temperatures extended further into the beginning August, although Toronto here is feeling some relief. Lastly, as per usual, production is trending downwards from the weekend highs. ~CL
July 25th, 2022 – Natural Gas Market Update | Happy last Monday of July everyone. Today marked another rally day for the NYMEX prompt month August contract as prices settled US$0.428/MMBtu up from Friday to close out at $8.727. Hot weather and storage concerns continues to be at the forefront of everyone’s natural gas concerns even with other fundamentals changing. For example, this week has already seen a pullback in temperatures and late in the day, news was circulating that Sabine Pass (another LNG facility) was in the process of shutting down Train 3 without indication of how long the outage would last. End of month is also notoriously known for volatility, especially since the contract will be expiring in two days time. ~CL
July 22nd, 2022 – Natural Gas Market Update | Another hot day in streets of Toronto. The natural gas markets were following the heat across North America ,up 4.2% well into the Winter of 2023. The main driver is the anticipated short supply and anticipated LNG back in production in the fall. One trader advised me this morning the Eastern US and Western US price of supply is trading in the $11.00 – 12.00 USD/MMBtu range and will continue to push the price upwards in order to squeeze the spread between Europe and North America. If the market continues to accept these prices levels, we could be setting a new floor price! Enjoy the summer weekend weather. (RS)
July 21st, 2022 – Natural Gas Market Update | Natural Gas markets somewhat stalled out today settling up $0.02 on the close with a weak storage injection and more news around supply constraints. Traders are working with limited information in real time in a market overloaded with data and news. Some news worthy points of view Nippon Steel Corporation in Japan purchased LNG for $41 MMBtu for cargo worth $135 million USD today. This is considered the highest price ever paid in Japan. North America continues to be the lowest cost carbon on the planet at $8.00 USD/MMBtu as of today’s close of business. Stay cool. (RS)
July 20th, 2022 – Natural Gas Market Update | Natural Gas markets were short squeezed at the end of the trading day, moving up more than $0.60 USD/MMBtu through the curve. Traders are starting to get jittery as the heat wave in the Southern US is consuming significant amount of natural gas to produce peak day power supply. The weather outlook into September 2022 is abnormally warm across North America and Europe. Natural Gas represents 38% of all power produced in the US, followed by Coal at 25%, Nuclear 20% and Renewable 10%. Gas continues to displace coal due to the lower carbon emissions. In comparison, Coal is trading at $400 per tonne in Europe compared to $6.00 in North America. Take care. (RS)
July 19th, 2022 – Natural Gas Market Update | Markets were reacting to a number of factors today with a retracement of 0.14 USD/MMBtu throughout the curve. It is interesting to note the disconnect from the future markets versus the physical markets are unhinged at this point. The physical natural gas is often more expensive to purchase at the local markets where the future are the average of the North American market. In so far as demand, it appears we could be in for the hottest week of the summer next week. Stay cool. (RS)
July 18th, 2022 – Natural Gas Market Update | Markets were reacting to a number of factors over the weekend. Air conditioning demand continues to rise as we work our way through the summer months. Demand is strong displacing weak gas supply and the opportunity to store gas for the upcoming winter season. NYMEX rose by more than $0.40 USD/MMBltu over the short term months, moving the cure on an upward trend once again. Russia’s Gazprom declared a force majeure for one of their major customers, unable to fill the supply obligations. Stay well. (RS)
July 15th, 2022 – Natural Gas Market Update | Today marked a rather exciting Friday compared to previous weeks. The August prompt month NYMEX natural gas contract climbed US$0.416/MMBtu today and settled over seven dollars for the first time since June 17th. The catalyst for the climb was primarily due to the outlook of hot weather coming up for the end of July and pressure overseas in Europe as LNG cuts and Russia have been unable to hold constant supply. Many analysts believe a drop will come before today’s close as traders look to minimize risk over the weekend, but a 8.02% move on the screen is still quite amazing to see. ~CL
July 14th, 2022 – Natural Gas Market Update | Happy Thursday! Natural gas continued to bump around today both before and after the U.S. Energy Information Administration’s Weekly Natural Gas Storage Report. As per usual, industry analyst and expert consensus was gathered and came in at: (1) Average of 55.6 Bcf, (2) Median at 56.3 Bcf, and (3) Range of 43 to 69 Bcf (recall positive numbers indicate an injection, which makes sense given the summer season). The actual number came in at 58 Bcf, slightly larger than expected and hence slightly bearish on prices. In fact, prices hit a high of US$6.898/MMBtu at around 8:30AM, and where trading at around $6.80 before failing to a low of $6.537 after the 10:30AM release. After attempting to recover, prices hit resistance at $6.80 levels and settled the day out at $6.60, $0.089 down from yesterday. For the time being, we continue to trade within a bounded range below $7. Factors to watch for going forwards will be weather, production levels, and the storage balance projections for End of Season (October 2022). So far, weather is projected to be hot going out of July into August, which would imply higher prices as power generation increases demand of natural gas. Additionally, production has recently being seeing a trend in which higher numbers are reported for the weekend with a drop during the week attributable to pipeline maintenance and operational issues. ~CL
July 13th, 2022 – Natural Gas Market Update | Happy Wednesday everyone. Today marked another wide trading day in natural gas. The August 2022 futures contract traded within a US$0.597/MMBtu range today, settling +$0.526 from yesterday. Production continues to be down at 96.1 Bcf, well off the weekend highs of +97 Bcf. Additionally, we are seeing a number of maintenance projects and infrastructure difficulties going on. Today in both Alabama and Pennsylvania, Kinder Morgan issued two force majeures (which are events outside of the reasonable scope that effect service). For the first, repairs are said to be needed at a compressor station, well for the second, a pipe damage led to a five-acre forest fire last night. These type of infrastructure outages usually leads to a spread in prices between where the gas enters the system and where it exits. The reason being that, if the gas at the point of origin becomes heavily oversupplied while the point of receipt loses on delivery. ~CL
July 12th, 2022 – Natural Gas Market Update | Happy Tuesday everyone! Large swings in natural gas yet again. The prompt month August NYMEX natural gas contract traded with a US$0.772/MMBtu range today between $6.014 and $6.786, before settling down $0.263 from yesterday at $6.163. Early day highs are attributable to production declines and extended heat forecasts going into the end of July. Production declines are a result of scheduled maintenance, while heat is expected to bring additional power generation demand online. Internationally, prices still trade around the $50 mark, as fears of additional Russian gas cuts are on the line. To give another perspective on the current landscape, we are seeing storage report estimates of +50 Bcf, which is significantly smaller than last week’s actual injection of 60 Bcf. The drop comes from warmer temperatures and a decrease recently in Canadian imports. With the hot weather to come, we will continue to see some pressure from AC demand. ~CL
July 11th, 2022 – Natural Gas Market Update | Happy Monday! We were out last Friday due to the nationwide Rogers outage, but it’s nice to be back and writing. In terms of pricing action, the prompt month August 2022 NYMEX natural gas contract traded within a range of US$6.232/MMBtu and $6.689, settling +$0.392 from Friday at $6.426. A lot of the push upwards is due to warmer weather forecasting as well as slight reduction in production following monthly highs seen last Friday and over the weekend. It appears that a part of the move is also attributable to a large fire on Saturday afternoon engulfed a natural gas plant in the small norther Oklahoma town of Medford. It seems that an increasing number of infrastructure incidents have been coming up lately, and although most on the small scale will be resolved shortly, if this trend continues or if larger outages such as Freeport LNG emerge, there could be lasting impacts on prices. Additionally, prices overseas continue to stay high as energy pressures continue to hold. ~CL
July 7th, 2022 – Natural Gas Market Update | Good afternoon everyone! Today actually marked quite an exciting day in natural gas due to the U.S. Energy Information Administration storage report. While market sentiment hovered around an injection of 70 billion cubic feet (Bcf) for the week ending July 1st, 2022, the actual number came in at 60 Bcf. This led to the market rallying up to a high of US$6.381/MMBtu, effectively undoing the steep drop seen with last week’s report. The NYMEX prompt month August natural gas settled $0.787 up from yesterday, with momentum extending out past March 2025 up an average of $0.339. Prices still sit well below the $7+ of the past few months though, and will probably continue to do so until mid to late-August. In other news, a pipeline explosion occurred in Texas. While no injuries were reported, a fire did result, and resolution is taking place. Make sure to tune back-in tomorrow to see how the week rounds out, have a lovely evening! ~CL
July 6th, 2022 – Natural Gas Market Update | Happy Wednesday and welcome to July! We hope everyone had a restful long weekend. It’s been quiet in the market these days, but we’re here to give a rundown of the past few days. June 30th, 2022 – Last Thursday marked another U.S. Energy Information Administration (EIA) Lower-48 Natural Gas Storage Report*. While the industry consensus was an injection of 74 billion cubic feet (Bcf), the actual figure was a whopping 8 Bcf larger at 82 Bcf. This injection was also significantly greater (+9 Bcf) than last year’s injection for the same week. Although the weather was warm for the week, it appears that the outage at Freeport LNG has a larger than expected impact. In fact, the time until the facility comes back online has been extended from September to October 2022, relieving further demand pressure for the time being. July 1st, 2022 and July 4th, 2022 were holidays in the Canada and U.S. respectively, while yesterday was quite quiet. For TODAY, the NYMEX prompt month August natural gas contract traded within a US$0.357/MMBtu range, hitting a high of $5.737 and a low if $5.38 before settling -$0.013 at $5.51. We’ll be able to gauge storage effects once again tomorrow, but in the meantime, without any other major news, prices will stay on the softer side. ~CL. *As a quick reminder, there are a couple of reasons we refer to and monitor this U.S. generated information: (1) The benchmark natural gas contract is the NYMEX (New York Mercantile Exchange) Henry Hub contract. This contract is traded similarly to a stock in which prices are publicly known, and reflects pricing in Louisiana. All other prices, can be thought to be derived off of this price by applying either a premium or discount depending on local market fundamentals. Since it is located in the U.S. though, we see data from down south more publicly available and having more of a direct impact.
June 28th, 2022 – Natural Gas Market Update | Trading was more active today as we work to close out the July 22 futures contract. Markets were up $0.11 at the end of the day on a modest day of trading. Weather patterns are still not forming enough to give this market a reason to rally hard at this point in time. Production continues to remain the issue as we move into the second half of 2022. Demand is down slightly although not enough to move the market either way at this point. Take care. (RS)
June 27th, 2022 – Natural Gas Market Update | A short week ahead, as we celebrate Canada Day on the 1st and the 4th for the US. Trading will be condensed this week due to both holidays, posting gains of 3.5% across the board with the July 22 contract rolling off this week. The tropical storms are gaining action, with three systems now being tracked by the National Hurricane Centre. Normally not of major concern until a storm is projected to hit landfall. Production was up slightly over the weekend although dropped off today. Stay well. (RS)
June 24th, 2022 – Natural Gas Market Update | Happy last Friday of June everyone! Time sure flies when you’re trying to stay on top of a topic like natural gas! Today marked another relatively quiet day with the July NYMEX contract within a a US$0.316/MMBtu range between $6.021 and $ 6.337. The contract settled for the day at $6.22, down $0.019 from yesterday. While it was relatively quiet this week, with a clear downward trend, next Monday and Tuesday may show some action as July expires and rolls off as the prompt month contract. All-in-all, analysts still believe that with the current landscape, prices will remain low, but they will look to ramp back up later in the summer as per usual. ~CL
June 23rd, 2022 – Natural Gas Market Update | Natural gas prices continued to fall today for July 2022 to June 2023 NYMEX contracts. The main catalyst was the release of the U.S. Energy Information Administration (EIA) storage report. This week’s report was for the week ending June 17th, which was fairly warm. The industry consensus ranged from the low to mid-60s in terms of total injections, but the actual report came in at 74 billion cubic feet, quite bearish on prices. Following the news, the July prompt month futures contract fell from US$6.70/MMBtu to $6.20. 2:30PM settlement saw a price of $6.239, which is down $0.619 from yesterday, or slightly over 9%. Expectations are that prices will continue to trade with the sub-$7 range up to $6.80, and should not rebound until late August to early September for the Fall ~CL
June 22nd, 2022 – Natural Gas Market Update | Another quiet day in trading. Similar to yesterday, the NYMEX prompt month July natural gas contract traded within a relatively tight range between a low of US$6.575/MMBtu and a high of $6.93. The contract settled up slightly from yesterday at $6.858 (+$0.05), but can be considered a minimal change as we continue to trade within the same range. While production has dropped from previous highs, weather revisions to below normal have taken out some of the previous demand. For the time being, while we are feeling some pressing heat at the moment, weather is expected to remain the same as last week until the end of June. ~CL
June 21st, 2022 – Natural Gas Market Update | Happy Summer Solstice, we’ve got some super hot weather in Toronto to mark the occasion! Yesterday marked the U.S. Juneteenth holiday so there was minimal activity, but we’re back today! After markets fell after closing on Friday, they’ve made a slight comeback today. The July prompt month NYMEX traded within a range of US$6.554/MMBtu to $6.976 today, and settled at $6.808, down $0.136 from Friday. (Note that since yesterday was a holiday, markets settled early at 2PM and were open, but no settle is recorded). Two main factors continue to be at play for pricing, weather and the storage balance. While hotter weather led to more use from power generation and cooling, the outage at Freeport has really freed up some excess supply. ~CL
June 17th, 2022 – Natural Gas Market Update | Both June 17th and 20th are US holidays resulting in lower than average prices based on very light trading volume. This should not be a sign of where the markets is heading, more of a point in time. On the international energy news, the EU are outlining plans to reduce dependence on Russian natural gas by two thirds by years end. A complete cut off would deal a severe blow to the EU and the gas intensive industries. North America continues to be the lowest cost BTU on the plant with plans to bring manufacturing from Europe to North America. Enjoy the weekend. (RS)
June 16th, 2022 – Natural Gas Market Update | Markets were trying all day to rise and hold a 4% increase, although the buyers were just not enough to keep this market strong. Storage injection was within the range at 92, well within the range. At this point it is more of a waiting game until we realize the winter inventory levels. Meteorologist predicted another El Nino weather with bitter cold temperatures in the west and mild in the east. This could really cause issues for supply in the event the inventory levels are less than planned. Europe continues to plan for rolling shortages of natural gas this winter, while North America remains the lowest cost producer in the globe. Enjoy the sunshine. (RS)
June 15th, 2022 – Natural Gas Market Update | Markets were back up 4%, off yesterdays lows. Headline risks are moving markets with any type of information from weather, supply/demand, wind/solar production news are all moving targets with this market causing this market to swing. North American markets continue to remain a “bargain” overall in comparison to Europe where prices are $29.00 USD per MMbtu compared to our $7.42 USDper MMbtu with the potential for supply rationing this winter. We are currently operating in a supply driven inflationary period, not any different than in the early 1970’s and will stop until the supply corrects itself. On the oil side of the ledger, refining capacity remains limited since the last oil refinery was built in 1977 and we are still operating refineries from 1908! Markets are not interested in oil/gas capital investments, other than private equity. We will not see much relief until either demand slows down or supply ramps up. Demand for oil/gas has returned to pre-covid levels based on the latest data. Time will tell. (RS)
June 14th, 2022 – Natural Gas Market Update | Risk happens all at once with commodities. Today was one of those days, the future markets fell 15.5 % through to the winter of 2023; substantial move all at once. 2 Bcf of gas supply was removed from the export markets as the Freeport LNG plant will be out of commission well into the fall of 2022. This is clearly a buying opportunity in a tight supply/demand marketplace. Even as prices remain high, a price movement of this magnitude is unprecedented in the past eight months. The additional supply will assist in filling winter storage offsetting the potential of rationing supply. This is not good news for European and Asian markets where prices continue to climb. A good day for the end user! (RS)
June 13th, 2022 – Natural Gas Market Update | Happy Monday! Today appears to be similar to Fridays market activity as markets continue to remain range bound within a 2% movement either way. As we start to move towards the mid part of the week will offer a more concrete pattern for the balance of the month. It should also be noted we are half way through the year and only two more future contracts before we start into the fall cycle once again. Stay well. (RS)
June 10th, 2022 – Natural Gas Market Update |Happy Friday. Natural gas ended the week quietly, with the July prompt month NYMEX contract settling US$0.113/MMBtu down from yesterday, and trading within a (relatively) small range of $0.527. It’s still early in the month, and without any major updates, prices will start to hold. Revisions upward in production or news of hurricanes will have the potential to bring prices down, while warmer temperatures and small storage builds will allow for current prices to hold or higher prices to emerge. As we saw with the Freeport news, updates come spontaneously, but the RiteRate team will do our best to keep you up to date. Have a lovely weekend and make sure to catch up with us on Monday! ~CL
June 9th, 2022 – Natural Gas Market Update | Welcome back everyone, a couple of key updates today. First off, the Freeport LNG posted an update as this morning stating that it would be out of service for about three weeks time. This is equivalent to a demand increase of about 2 billion cubic feet (Bcf) per day, or a total of around 40 Bcf for the expected time down. However, analysts around the web have been laying out varying scenarios (i.e., Partial returns and extended down times), and see a potential of 60 Bcf down for a number of months. While the original news lead to a steep drop yesterday, the news actually helped to erase trader uncertainty this morning and reduce the impacts of the bearish news. This paired with today’s storage release (bullish) lead to the July prompt month NYMEX contract to settle +US$0.264/MMBtu at $8.963. The U.S. Energy Information Administration number came in at 97 Bcf, quite a lot smaller from the projected three-digit injection number expected following last week’s Memorial Day long weekend. That being said, prices appear to hold steady at around the $9 mark and will continue to do so unless we get further news on the changing fundamentals. ~CL
June 8th, 2022 – Natural Gas Market Update | Happy middle of the week everyone, what a day today for natural gas. The day started off strong following yesterday, with prices hitting a new high of US$9.664/MMBtu. Prices in fact, looked to stay up at these levels, given the lower production numbers and warmer temperatures for mid-June. At 12:40PM though, prices began to trend downward, and fell over a dollar to a low of $8.427. The catalyst for the fall? Reports arose that an explosion had occurred at the Freeport LNG* facility. While no personnel were injured, the impacts of the incident are still being investigated. Over the past 60 days, this facility has taken in up to 2 billion cubic feet (Bcf) per day of feed gas. To this extent, it could be possible that as the plant looks to return to service, the system will see an additional 2Bcf/d into storage. This would effectively shrink the existing deficit and help in alleviating winter natural gas stock concerns. This lead to traders selling-off some. What happens next is still a developing story. Make sure to return for our market update tomorrow to see where this goes as well as for the EIA’s weekly storage report. ~CL
June 7th, 2022 – Natural Gas Market Update | Happy Tuesday. Markets were rather quiet today (at least compared to yesterday). Although the July prompt month NYMEX natural gas contract hit a high of US$9.544/MMBtu overnight, it ultimately settled $0.029 down from yesterday at $9.293. Not much action in the background as increased demand for the rest of June due to warmer temperatures was confirmed in the most recent weather runs. That being said though, renewables are helping to aid more to the power generation mix given strong solar and wind, which has been the case for the past few weeks. We still sit at a high right now though in terms of pricing, and are waiting for a pullback to the nine dollar level for downward pressure. We’ll see if that comes into fruition, but for the time being, like gasoline prices, natural gas has gone up, up, and away. ~CL
June 6th, 2022 – Natural Gas Market Update | Welcome back everyone! Today marked quite the uphill climb in prices today. The news of a warmer weather forecast leading to additional cooling degree days (CDD), lead the prompt month July natural gas contract to settle US$0.799/MMBtu up from Friday at $9.322. The upward pressure extended outwards to March 2024 (+$0.219) and beyond, with April 2024 to February 2028 being up on average $0.122. We will most likely see more activity this week as traders look to jump in and out, but we definitely see prices beyond this winter also feeling the heat (no pun intended). As we near a price peak of $9.794 from 2000, prices are meeting resistance at $9.40. (RS)
June 3rd, 2022 – Natural Gas Market Update |Markets were sideways all day; up this morning and then back to where we started the day. I was listening to Nine point Energy, a leading investment fund this morning, and noted a few key takeaways. First point was the majority of oil/gas companies continue to work towards buying back shares and reducing debt off the balance sheet. Based on Nine points projections, oil and gas companies will be debt free by Q2 of 2023 with no growth in production. Second point is cash flow yields remain at 25% with stocks tripling over the past twelve months. And lastly Crude oil needs to reach $150 USD/Barrel to start killing discretionary spending. All these points lead to even higher prices for the next few years. Until we see demand destruction ( less demand ) we are in for a long haul. As one commentary noted “the party is just starting”. Time to pull the bicycle out of the garage. (RS)
June 2nd, 2022 – Natural Gas Market Update | Markets were off today based on a higher than average storage injection creating a greater cushion as we move through the summer heat load into the winter demand. The markets are taking into consideration the war premium at this point and more focused on the supply side at this point. RBC is reporting the OPEC+ agreement could expire in September. Russia is part the “+” that could affect the overall production of the cartel moving forward. The US and Saudi Arabia continue to work on a bi lateral oil transaction to ease the pressure on North American price pressure. Take care. (RS)
June 1st, 2022 – Natural Gas Market Update | Happy first day of June, we’re almost halfway into 2022 and what a year it has been so far (in natural gas at least). Today saw a fair amount of action with the July NYMEX natural gas contract settling up US$0.551/MMBtu at $8.696. This effectively undid the downward changes from yesterday and we are back at last week’s levels. To note though, would be how far the upward move extended for the day. Prices beyond April 2023 that were previously unchanged also settled on average twenty cents higher than yesterday. Production continues to be a major influencing factor, being down from weekend levels. Additionally, there is uncertainty regarding hurricane activity and the potential effects on the Gulf of Mexico, both for production and liquefied natural gas exports. Tomorrow marks the weekly storage report release. The result could act as a kick-off point for a run either way, so make sure to tune-in tomorrow to stay up to date with natural gas! ~CL
May 31st, 2022 – Natural Gas Market Update | Markets were closed Monday for the Memorial Day US holiday. This morning the markets opened down 5% and settled down 6% overall all through the Winter 2022/2023. These are the early days of trading for the July 22 futures and traders will move the market around to find the balance of demand amongst the market participants. Too early to tell if this is
May 27th, 2022 – Natural Gas Market Update | Happy Friday everyone. Today marked the first day of the July NYMEX contract trading as the prompt month. Overall, a $0.61 range was covered spanning from $8.285 to $8.895. The contract ultimately settled lower than yesterday once again at $8.727. The downward pressure extended outwards to March 2023, and we should see some softness into early next week given the warmer weather coming and the holiday on Monday. Have a great weekend! ~CL
May 26th, 2022 – Natural Gas Market Update | Happy Thursday! A number of events happen to fall on today, with both a U.S. Energy Information Administration (EIA) storage report and the final day of the June NYMEX natural gas contract trading as the prompt month contract. First off for storage, the industry average survey came in at an injection of 86 billion cubic feet (Bcf), with the actual number coming in quite short of that at 80 Bcf. As mentioned yesterday, a smaller than expected injection is bullish. It indicates that the supply and demand numbers were tighter than expected, so less gas was required to be stored for future use. As a result, markets took off again, hitting a high of US$9.401/MMBtu. Similar to previous days though, a reversal was seen after with the June contract ultimately settling down $0.063 at $8.908. All contracts out to March 2023 settled down on average ten cents from yesterday. The week will most likely end quietly with tomorrow being the first day of the July contract trading as the prompt month and the U.S. Memorial Day long weekend next Monday. ~CL
May 25th, 2022 – Natural Gas Market Update | Another exciting day in natural gas today. Early in the morning, the prompt month June NYMEX natural gas contract climbed to a new high of US$9.399/MMBtu. The range of trading for today covered $0.634, and the contract ultimately settled $0.175 up from yesterday at $8.971. A lot of today’s fluctuations revolved around options expiring as well as the bullish sentiment arising from natural gas storage. As mentioned previously, we still look to sit at quite a deficit compared to previous years, leading analysts to expect further tightness for this coming winter and beyond. (Infographic) As an early outlook for tomorrow’s report release, the consensus average came in at 85.9 billion cubic feet (Bcf), with the overall range being from 76 Bcf to 103 Bcf. An number above 85.9 Bcf should have a bearish effect on prices since it indicates that more than expected was injected into storage, therefore shrinking the existing deficit, while a number below should have a bullish effect for opposite reasons. We use should as as observed recently, markets have not been very sensitive to storage releases. Whatever happens though, make sure to find out by keeping with natural gas with our daily market updates. ~CL
May 24th, 2022 – Natural Gas Market Update | Welcome back from the long weekend everyone! It was a quite a day to be back following a steep climb yesterday as I enjoyed the sun. Recall that all natural gas prices in North America are benchmarked to the NYMEX (New York Mercantile Exchange) Henry Hub contract located in Louisiana, U.S.A. Given this, the trading hours follows that of the States, with yesterday open and next Monday closing early for Memorial Day. So after yesterday’s climb, the June prompt month natural gas contract hit a high of US$8.93/MMBtu before trading down to $8.605 and bouncing throughout the day. The contract ultimately settled at $8.796, up $0.052 cents from yesterday, and $0.701 up from last Friday. Much of the volatility now is from options expiring tomorrow, with the June contract rolling off shortly afterwards. Storage still plays a key factor in how comfortable supply is for this coming winter, and we’ll see if market concerns are valid in two days with the U.S. Energy Information Administration’s report this Thursday. ~CL
May 20th, 2022 – Natural Gas Market Update | Nattie was off by 3.5 % for the balance of the day as we move into the first holiday of the year. Markets are somewhat choppy on any evidence of supply as we move into the cooling season. Warmer weather is the focus of the recent downward price movement. Russia and Finland are in a discussions as Putin notified Finland their gas supply would be cut unless payment is made in either Euro’s of USD. All the best over the long weekend. (RS)
May 19th, 2022 – Natural Gas Market Update | Natural Gas was down 2% on the day through to 2023. Markets reacted to a larger than projected storage injection and continued concern regarding the economic trends. In general global energy shortages are not in the line at gas stations where customers grumble about the cost of fuel. They show up in business’ closing, soaring inflation and high utility bills all that rely on natural gas. The potential problems are every so quiet and sneek into the economy ever so slowly. The movement from fossil fuels to alternative energy is bearing the brunt of high prices across the board. Lets hope it’s short lived. Leave the car at home today! (RS)
May 18th, 2022 – Natural Gas Market Update | Natty traded on both sides of the pin today, opening up ~2% before following the broader market lower. Eventually recovering, the balance of the curve finished in slight positive territory, with the winter 2024 contracts outperforming the rest of the curve. The stock market had its worst day of the year after Target missed earnings guidance. The company blamed higher energy and labour costs, mixed with shifting consumer spending habits for the disastrous results. There really isn’t a silver lining here, except for the fact that it’s Whopper Wednesday and the EIA storage report is on deck for tomorrow. AC
May 17th, 2022 – Natural Gas Market Update | Happy Tuesday everyone. Natural gas prices continued to climb today on the news of lower production due to maintenance. The June prompt month contract climbed overnight and hit a high of US$8.372/MMBtu today before coming down to settle at $8.304 This is still up $0.348 from yesterday’s settle really emphasizing how even the slightest of bullish news is able to leverage existing momentum from the bulls. For those concerned about this move though should rest somewhat assured that it will most likely be temporary as production is expected to return and even hit a high of 96 billion cubic feet (Bcf) over the next few days. ~CL
May 16th, 2022 – Natural Gas Market Update | Well it must be Monday as Natural gas markets were jumping all day as the June prompt month NYMEX contract settled US$0.37 MMbtu up from last weeks close. Slightly colder weather is projected in the forecast and continues to oscilate depending on the source. We are starting to trade the second half of the month which normally identifies signs of strength as we move towards the final days of trading for the June 22 contract. As we roll into June we are now within a short period of time to fill storage for the following year and meet the summer cooling demand oftern a source of natural gas fired generation. More volatility could be the trend for the balance of the summer. Take care. (RS)
May 13th, 2022 – Natural gas Market Update | Hello to everyone and hello to Friday the 13th, it’s been a while since we’ve had one! Natural gas markets were rather calm today as the June prompt month NYMEX contract settled US$0.076/MMBtu down from yesterday at $7.663. The downward move extended outwards to February 2023, but was relatively flat for March 2023 and beyond. Weather and production continues to fluctuate day-to-day, with the existing trends expected to continue. Industry analysts are seeing a drop in production early next week paired with some warmer temperatures that could lead to some higher prices. However, we still continue to trade within the same range with the June contract testing $7.80 but failing to move beyond that. As always, thanks for tuning in to our daily market update. We hope you enjoy the warmer weekend weather, check-in next Monday! ~CL
May 12th, 2022 – Natural Gas Market Update | Happy Thursday everyone! Today marked the weekly release of the U.S. EIA storage report. While the industry average came in at an injection of 79.5 billion cubic feet (Bcf), many top forecasters came in above that in the low 80s. The actual report though, came in at a low of 76 Bcf at the 10:30AM release. Recall that when less than expected gas is injected into storage, this signifies that more gas was used and that the current supply demand balance is tighter than predicted. All in all, the June prompt month natural gas contract currently trades at similar levels to early this week, settling +US$0.099/MMBtu up from yesterday at $7.739 (far from the dollar swings earlier). As we look to round out another week in natty gas, warmer weather is upon us! Follow us as we transition to a different dynamic and carry on to see where we’re heading for the near term and beyond.! ~CL
May 11th, 2022 – Natural Gas Market Update | Summer has arrived in Toronto with 25deg C sun and heat, perhaps the start of the hot summer projections. Markets were up from yesterdays lows bouncing off the bottom where traders were buying up the lows and moving the market back to where we were late last week. This market seems to be range bound with a tendency to move higher with any sign of bullish events. Pipeline constraints will remain an issue as we move forward through the year. Even if production increases, we still remain short on pipeline capacity to the consuming markets. Enjoy the great weather. (RS)
May 10th, 2022 – Natural Gas Market Update | Happy Tuesday everyone! Today saw a reversal in yesterday’s action early on in the day. Domestic production fell slightly overnight, but it was really overseas news once again that drove a rally upwards in the NYMEX. The Ukraine Gas Transmission Operator (@GasTSOua) declared at 9AM EST a force majeure on the smaller of two natural gas pipelines that delivers Russian volume into Ukraine. Force majeure is defined as any unforeseeable circumstance that prevents someone from fulfilling a contract. In this case, it was deemed that the Russian military aggression and occupation would not allow for the continued operation of the Sokhranivka connection. Following this news, the NYMEX prompt month June 2022 contract went from a low of US$6.43/MMBtu to a high of $7.463. For the remainder of the afternoon, the contract fluctuated around the $7.27 mark (May 2022 contract settle) before settling EST +$0.359 from yesterday at $7.385. At the time of writing, the contract is trending downwards again, currently at $7.175. In terms of domestic fundamentals, the U.S. Energy Information Administration revised down their production estimates until the end of 2022 but looked to add to production volumes for 2023 onward. This summer is expected to be warmer than usual due to the ongoing La Niña, we’re expecting a hotter summer (bullish), but also one filled with storms. Hurricane season often leads to liquefied natural gas (LNG) cargo cancellations, which would help in easing some of the supply demand tightness (bearish). As always, we’re using a lot of technical terms, but the main takeaway today would be the importance of the net effect of these different fundamentals. You might have noticed in the brackets that one side we’re seeing bullish indicators (higher prices) vs. bearish indicators (lower prices). At the time, it’s hard to tell which side will emerge, but we’ll know as we get closer. The best thing to do? Stay up to date on natural gas with RiteRate’s Market Updates on the daily. ~CL
May 9th, 2022 – Natural Gas Market Update | Happy Monday from RiteRate! Welcome back to another wild day in “natty.” As per usual, markets opened yesterday at 6PM EST and saw some upward momentum with some outlook to undo the downward run last Friday. This upward direction was short-lived though and markets began to fall at around 6AM EST as day traders returned to their desks. After hitting a high of US$8.287/MMBtu for the day, the June prompt month natural gas contract tumbled $1.017 down to settle out the day at $7.026. For perspective, this is equivalent to a 12.5% move down day-over-day! The downward pressure is being driven by both fundamentals and traders alike. For one, production is now back online from last week’s low. Recall that we dropped to around 91 billion cubic feet per day, but has now returned to 94.75 Bcf/d as of last night. Additionally, the weather forecast has neutralized somewhat, loosening up some of the later demand. NYMEX traders are also looking to push natural gas around. Previously, the “bulls” were deemed to be in control as they looked to push prices to the ceiling to capitalize on on their existing positions. After testing $9 and coming down though, the “bears” are looking to take over, with a $6.80 price looking to be the next level to test. We get that a lot of our terminology here may be confusing or fast-paced so don’t hesitate to reach out to us through our Contact Us page if you have any questions! Our Natural Gas 101 series is also great for some intro to natural gas content. Most importantly though, just make sure to continue following along with our daily market update report to stay up to date with natty! ~CL
May 6th, 2022 – Natural Gas Market Update | Happy first Friday of May everyone! Today was a major down day in natural gas as the prompt month June NYMEX contract settled US$0.74/MMBtu down from yesterday at $8.043. The contract some continued momentum overnight yesterday and tested a high of $8.996 before coming back down with the news of production coming back online. To recap, U.S. production fell to a low of 91 billion cubic feet (Bcf) early this week and the fear of lack of supply was enough to keep the bulls on edge and fired up. While this relief is welcome, we aren’t sure how long it will last given the volatile markets these days. This could just be the result of long position holders liquidating some of their positions into the weekend. It looks like only time will tell! Have a lovely weekend and enjoy the warmer weather. ~CL
May 4th, 2022 – Natural Gas Market Update | This report feels more like a cut and paste exercise; market are up 6% right through the next twelve month strip. Some analyst believe we could see another $2.00 increase into the summer months. What is the driver? Production continues to remain 2 BCF short daily based on demand during a shoulder month, meaning we are in a limited heating and cooling season. Once we start entering the cooling season, we are bound to see a more volatility in prices. The EU announced a decrease in Russian oil production and remain silent on gas imports. Natural gas could be Russia’s new economic weapon in the ongoing dispute. Enjoy the sunny afternoon. (RS)
May 3rd, 2022 – Natural Gas Market Update | Welcome to another day of Natural Gas volatility as the market gapped up $0.48USD/Mmbtu for the June 22 contract. The back of this market in trading $4.00 lower on the current 12 month terms and would be considered a suitable position to mitigate risk. Weather models have not changed over the past 24 hours and view the market sentiment on speculative traders and hedge funds. Take care. (RS)
May 2nd, 2022 – Natural Gas Market Update | Welcome to another month of Natural Gas volatility as the market gapped up $0.35USD/MMBtu settling at $7.59 for the June 22 contract. The technicals continue to remain bullish, although gas production can still rise in the days ahead. Natural Gas consumption is projected to drop by 1.8 BCF per day, week over week, with the potential of prices cooling off this market. Nat Gas Weather noted “Only slight changes to timing of swings in national demand over the weekend with near seasonal demand the next 7-days due to a mix of late season heating needs across the northern US and light cooling demand across the southern US,”. Enjoy the spring weather! (RS)
April 29th, 2022 – Natural Gas Market Update | Happy Friday everyone! Time is flying by, I can’t believe it’s May next week. Today marked a rather active day for natural gas as opposed to the previous quieter week ends. The prompt month June NYMEX contract settled up US$0.356/MMBtu today at $7.244, the same level at which the May contract expired two days earlier. Most of the fundamentals indicated lower prices actually, so this move upwards could be theorized to a number of factors such as traders entering positions for the rest of this month or perhaps increasing European prices are leading to higher prices domestically. Given that the most recent weather model was warmer and production is expected to return next week after hitting a low, maybe $7 is the new normal. Make sure to stay up to date with our daily market updates as we test this hypothesis, and enjoy the lovely weather this weekend! ~CL
April 28th, 2022 – Natural Gas Market Update | Happy last Thursday of April everyone! Today marked the first day of the June NYMEX Natural Gas contract trading as the prompt month contract as well as another U.S. Energy Information Administration (EIA) storage release. Contrary to yesterday’s upwards momentum, there was a lot of downward pressure today with the June contract settling US$0.451/MMBtu down at $6.888. Production levels are returning and expected to return to 94/95 billion cubic feet (Bcf) per day by next Monday or Tuesday (recall that production dropped to 91.6 Bcf/day on Tuesday, the lowest level since March 11th, 2022). Asides from production side fundamentals, today’s storage report also was relatively neutral. The industry estimate came in at an injection of 39.2 Bcf with the actual number coming in at 40 Bcf. As we look to transition into the summer months, we shift our focus to hurricanes and worldwide demand. Make sure to stay up to date with our daily Market Updates. ~CL
April 27th, 2022 – Natural Gas Market Update |Markets are up 7% ($0.53 USD/MMBtu) right through to March 23 as the May 2022 contract rolls off the board. The Nymex contract settled at 6.97 USD/MMBtu and remains range bound within the weekly resistance bands. Any movement above $7.02 could move the market up further. Russia has threatened to curatil gas supply to Poland and Belarus unless payments are made in Rubles. Poland’s contract with Russia will end in the fall of 2023 and have no plans to renew the agreement. Poland has also stockpiled gas supply for the summer months in order to maintain steady supply through to the fall. The issue will most likely move to one of the other European countries gas supply lines. Just another day at the office for natural gas. Enjoy! (RS)
April 26th, 2022 – Natural Gas Market Update |Markets were trading within a $0.25 range right through to April 23 for the balance of the day. We settled 0.19 USD/MMBtu up from yesterday setting the stage for a short squeeze when the May 22 contract settles. An interesting article from Desjardin bank on oil and gas noting the amount of production per group of wells continues to lag historical production with commodity prices poised to move higher. We will see how the month ends tomorrow. (RS)
April 25th, 2022 – Natural Gas Market Update | It finally feels like spring this morning although Natural Gas ignored Southern Ontario’s warm weather. The energy markets started the day selling off as traders were “selling off risk”, in other words claiming gains thus far. China’s Covid outbreaks appear to be hitting commodities and equities across the board. Oil futures were down $5.00 for WTI and remain range bound between $93.00 and $106.00. Natural gas seems to be following similar patterns; selling off in the early part of the day and now back up $0.40 USD/MMBtu well into the May 23 forward dated contracts. Based on our read of the market, speculators continue to represent the bulk of the market irrelevant of the current weather conditions. April 27th is the final day of trading for the May 22 future contracts; we could see a short squeeze later this week. Stay well. (RS)
April 22nd, 2022 – Natural Gas Market Update | Happy Friday everyone! Today marked a relatively quiet day to end a rather hectic week. Natural gas continued to see red today, with the May prompt month NYMEX contract settling down US$0.423/MMBtu at $6.534. In total, this price is now $1.286 off the April 19th settle of $7.82, and $1.53 off the contract high at $8.064. We are returning now to more fundamental drivers as this downward pressure is arising from the loosening of the supply and demand balance. For next week, weather runs are projecting a warm lead up into May, resulting in a projected drop of 4.6 billion cubic feet (Bcf) per day of consumption while production remains relatively unchanged at around 94 Bcf/day. The May contract expires next Wednesday though, so there still is some time for changes. Make sure to stay up to date with our Market Updates to know what’s happening in natural gas! ~CL
April 21st, 2022 – Natural Gas Market Update | Happy Thursday everyone! Of note today is the U.S. Energy Information Administrative Lower-48 storage report. Released at 10:30AM, this report helps to shape a number of outlooks. Many analysts do their own modelling of gas flows on a daily basis and present their natural gas storage estimates. This number is then used as a benchmark against the actual release. Today, the market consensus was around 41 billion cubic feet (Bcf) vs. the actual injection number of 53 Bcf. Since the actual number is larger than what was originally forecasted , it indicates that the supply and demand balance isn’t as tight as expected, a bearish indicator for future prices. Following this news, the May NYMEX natural gas contract fell to a low of US$6.703/MMBtu before rebounding to settle $0.02 up from yesterday at $6.957. Additionally, April 2023 and beyond went quite red today with the downward momentum extending to 2030 and beyond. It is important to remember though that further dated contracts are not as frequently traded and that there is still quite a lot of room for upwards potential (i.e., March 2023 at $6.156 vs. April 2023 at $4.406). Still lots of action to come as trading continues into expiry, make sure to tune back in tomorrow! ~CL
April 20th, 2022 – Natural Gas Market Update | Happy middle of the week and happy two year anniversary to oil prices going negative! Markets continued to undo Monday’s rally upward today, hitting a high of US$7.41/MMBtu early this morning before coming down $0.239 to settle at $6.937 at 2:30PM. Pressure downwards extended out wards to the summer of 2024, as the forward curve returned to price levels seen last week. The overall market sentiment is still fairly bullish though although we will be keeping our eye out for periods of further pullback. Looking to the short term, weather is expected to continue below average into May, which will look to effect the storage inventory balance (report coming out tomorrow!). Additionally, although production is slowly returning, demand continues to outstrip the incremental volumes with all that’s going on domestically and beyond. A lot of readers have been wondering what exactly affects natural gas prices and while there’s a lot to talk about, make sure to visit our Natural Gas 101 with RiteRate! series for a simple breakdown of the behind the scenes drivers. ~CL
April 18th, 2022 – Natural Gas Market Update | Happy Tuesday everyone! In terms of natural gas, we’re back to where we were last Thursday. After surpassing US$8/MMBtu yesterday, the market decided that technically it was overbought and corrected itself down to the $7 level in the May prompt month contract. This downward pressure extended outwards to December 2024 with May 2022 to March 2023 down an average of $0.79, April 2023 to March 2024 down an average of $0.17, and April to December 2024 down $0.06. There’s still a week left with May 2022 trading as the prompt month contract, and with most term traders already having rolled over their contracts, we expect relatively high volatility as day traders take the stage to capitalize on intraday volatility. At the same time, we are seeing higher prices on the horizon to come with July 2022 currently trading the highest out of the summer months, and the October/November 2022 spread quite tight at $0.064. What do you mean technically? In the world of pricing analytics, there are two major schools of analysis, (1) Fundamentals and (2) Technicals. Fundamental analysis refers to studying the physical market and covers many of the factors we talk about such as supply and demand and storage. Technical analysis on the other hand studies price movement, i.e., If prices hit US$8/MMBtu and came back down, it would be reasonable to classify this price as a point of resistance. This means that the next time prices climb, we will want to watch how prices approach this level, and we can be relatively confident that prices will struggle a bit to surpass the level. Additionally, there are a number of indicators technical traders use to determine the state of the market. For example, the stochastic oscillator analyzes market behaviour and indicates when the contract is overbought or oversold. It is important to remember that the marketplace is made up of a variety of individuals, both human and computer, so when a significant number of individuals come to the same conclusion (or a few individuals with sizable positions), they often make up the decision for the rest of the market as well. ~CL
April 15th, 2022 – Natural Gas Market Update | Happy Monday everyone, welcome back from a restful long weekend! Natural gas markets were closed since Thursday evening, but came back with quite some noise today. Following the Sunday 6:30PM EST open, the May prompt month contract saw a gap upwards of US$0.20/MMBtu to $7.50 before holding and trading sideways. (Note: The NYMEX Natural Gas (NG) contract trades daily Sunday to Friday, 6PM to 4:30PM. This means that the market is closed from 4:30PM to 5:30PM Monday to Friday, and completely closed from 4:30PM on Friday until 6PM on Sunday). Come 8:30AM Monday morning , bullish news awaited traders returning to work, and helped to drive prices to a record high of $8.065 for the day. The contract ultimately did come down to settle at $7.82, still $0.52 up from last week. The main driver for today’s move is colder weather revisions showing below normal temperatures extending outwards to the start of May. There’s a lot of pressure on the demand side, and just not enough supply side response. ~CL
April 14th, 2022 – Natural Gas Market Update | This market is relentless, consistently increaseing 4% daily right through into late 2023. Europeans leaders are drafting a ban on Russian oil imports, a move long resisted, because of the potential to raise energy prices, as noted by The New York Times . The markets continue to be affected by liquidation of capital markets or credit due to bank lending due to banks leveraging ratios. This market requires almost twice as much capital as one year ago and this market does not have access to that type of capital. According to Goldman Sachs, we are entering an inflationary peak we have not seen for 40 years. These are unprecedented times in a global energy market with demand maintaining a strong push forward. We are off for the Easter weekend and back Monday. Perhaps leave the car at home this weekend and go for a walk! (RS)
April 13th, 2022 – Natural Gas Market Update | These prices are close to matching the highs exhibited back in 2008. Markets were up $0.39 USD/MMBtu on the prompt month and $0.34 over the twelve month term. Some of the main drivers are the increased demand from the industrial sector as North American manufacturing continues to ramp up. Secondly, the colder than normal temperature compared to 2021 in both the residential and commercial sectors. The ten day forecast continues to remain colder than normal seasonal temperatures. This type of trading pattern is known as the “Widow Maker”, as rapid changes in price have knocked speculators out of business, due to the spread from the current month versus the following month when utilities start to buy for the upcoming season. (RS)
April 12th, 2022 – Natural Gas Market Update | Natural gas markets remained strong the balance of the trading day with the prompt month mvoing with a $0.30/USD/MMBtu range closing up $0.05 at $6.65 for the May 22 contract. The spreads into the June 22 to October 22 are now trading higher than the current month as we continue to experience pressure on the balance of 2022. Traders are concerned about two main areas. Firstly, with their ability to fill storage for the upcoming winter. The spreads between the summer and winter of 2022 are $0.35 USD/MMBtu which remain historically narrow. Secondly, supply could be bid up and diverted to either Europe or Asia through Liquid Natural Gas. If either of these events occur, we could see further increases in the Winter of 2022 pricing. Storage operators will take the risk off the table through the purchase of future contracts to protect their position in the event physical gas is priced out of the market. One economist noted ” The biggest threat to a society is inadequete fuel and food”. Enjoy the balance of the sun today! (RS)
April 11th, 2022 – Natural Gas Market Update | This market feels more like a horse race than a commodity market! Natural gas futures were up 5% across the board well into the 2023 futures markets Under normal conditions we may view this type of market movement over a period of months, not within a day. We have covered the reasoning behind the continued price movement higher is merely based on a few fundamentals; lack of supply, lack of alternative fuel supply such as coal and a prolonged cold than normal winter leaving inventory in a tight supply narative. Some traders are also citing the cost of inflation thought to be in the 10-15% normalized for the oil/gas markets. One trader noted “once the market takes away the balancing mechaism, such as an alternative fuel, we wiill continue to realize extraordinary volatility”. Enjoy the short week. (RS)
April 8th, 2022 – Natural Gas Market Update | Happy Friday everyone! Today marked the end of pretty crazy trading week. The May prompt month NYMEX natural gas contract traded to a high of US$6.538/MMBtu today just before the 8:30AM open, and then proceeded to fall to a low of $6.257, ultimately settling at $6.278. As highlighted by many market analysts and research companies, it appears that natural gas is trading at a significant premium and not off of fundamentals really for the time being. As a pretty good indicator, the most recent model runs looked to add quite a bit of demand for the second half April, but markets sold off today. Although the exact reason isn’t known, this could be due to a number of long position holders selling to close out their positions so they eliminate the risk that may occur if the market gaps come Sunday evening. Lots of moving parts in natural gas these days with no real clear sense of direction. Join us as we navigate the market day by day with our Market Updates. ~CL
April 7th, 2022 – Natural Gas Market Update | Happy Thursday everyone! Another whirlwind day in natural gas, even knowing what might come, it’s hard to pinpoint where things are heading. Prices trended down from an overnight high of US$6.25/MMBtu into the start of the day, but as we’ve mentioned before, storage threw some out there news into the loop. While the market consensus came in at a withdrawal around 27 billion cubic feet (Bcf), the actual Energy Information Administrative (EIA) report showed 33 Bcf. As a refresher, gas is withdrawn from storage when there is a shortage in the market (i.e., Demand exceeds supply). When the number is larger than the estimate, it indicates that more gas was withdrawn than expected, a bullish indicator in two ways: (1) The current marketplace is tighter than previously perceived, and (2) Winter 2022 will have less storage gas inventory. While we talked about the current to 5-year average deficit shrinking by the end of the month, this larger than expected withdrawal will look to minimize that possibility, but we won’t know for sure until the next few weeks come and go. Lastly, today’s market action broke free from the previous days trends, climbing to settle at $6.359/MMBtu. Individuals are still of the opinion that due to political news, gas is heavily overpriced, with the actual value closer to mid-$5s. It’s still early in the month, so continue to visit RiteRate’s Market Updates to read about the latest changes in natural gas. ~CL
April 6th, 2022 – Natural Gas Market Update | Happy Wednesday everyone! Another wild day in the natural gas market! The May prompt month NYMEX contract began climbing slowly overnight before exploding into 8:30AM EST. The contract hit a record high of US$6.39/MMBtu before coming down to settle $0.003 down from yesterday at $6.029. This movement had quite a bit of momentum carrying out all the way to March 2023. In terms of fundamentals, the weather model runs adjust slightly lower than noted before, adding some demand, but production looked to recover as well. Many market experts are looking at storage levels to gauge market bullishness, and tomorrows report will be telling. As mentioned before, the storage deficit to the 5-year average emerged in January, but has since been decreasing and is expected to shrink come the end of April. Expectations are held that with less tightness in the market, the absence of any further political developments overseas will help to allow for some pricing relief. Until then, make sure to tune in to RiteRate’s natural gas updates on the daily! ~CL
April 5th, 2022 – Natural Gas Market Update | Happy Tuesday everyone, and what a Tuesday it was! The May prompt month natural gas NYMEX contract covered quite a move today. The contract started it’s climb today early in the morning, peaking at a high of US$6.201/MMBtu before coming down to settle at $6.032. The low of the day happened at the market open (6 PM EST yesterday), meaning the contract covered a total of move of $0.43 for the day. A trend appears to be emerging in which the contract prices move downwards into the 2:30PM EST settle as pictured below. The move today is attributable to a dip in production of 1.1 billion cubic feet (Bcf) paired with an increasing number of bulls in the market. Similar to what happened at the end of January for the Feb22 contract, a “short-squeeze” may have occurred. This term refers to instances where the market has a high volume of short sellers (a.k.a. Individuals who sell first and look to buy back later. Due to the increasing prices, a short-squeeze occurs when many of them either choose to exit or are forced to exit out of their positions at once. Looking ahead, production recovery will be key to see where price action heads next. ~CL
April 4th, 2022 – Natural Gas Market Update | Happy Monday everyone! Today marked another day off the prompt month contract testing new highs. The May prompt month NYMEX natural gas contract traded upwards to US$5.857/MMBtu today but failed to hold, ultimately settling relatively flat to Friday (-0.008). Weather patterns continue to show similar results in recent runs, highlight warmth to come on April 6th, and a slight cold blip to return for April 10th. As we look to transition over to summer, storage continues to remain a point of focus. For those who may remember from earlier posts, the storage deficit between the current year and the 5-year average has held strong since January 2022 until now. With warmer weather emerging though, market consensus has become increasingly bearish as the deficit is projected to shrink by the end of April. However, we won’t know for sure until we get there, so join us on our storage summaries each Thursday as well as daily here at Market Updates to see where natural gas is heading! ~ CL
April 1st, 2022 – Natural Gas Market Update | The first quarter of 2022 commodity price volatility was something for the history books. Looking forward, Germany is preparing to curtail their gas supply due to the potential of a Russian supply disruption. Russia is seeking payment in Rubles versus the contracted agreement of either USD or EUR, both prohibited under the current sanctions. Syria ,one of the regions largest exporter of Liquid Natural Gas, have striped Helium from the LNG and sold at the prevailing price of Natural Gas. Due to local supply constraints, Syrian Natural Gas is being diverted by pipeline to Spain casusing a Helium shortage and now trading at $600 per Mmbtu; no more birthday party balloons for a while! The release of Strategic Petroleum reserves (Oil) did offer short term relief to oil prices offering buyers as great opportunity to buy the dips. Once the US needs to refill the reserves, in a very limited supply market , prices are projected to rebound. These are alll signs of a potential bull market. The May 22 Natural Gas contract was relatively flat the balance of the day, remaing within a predicted range with oil. Good time to buy market dips to protect your budget. Being exposed in this market could be costly long term. All the best. (RS)
March 30th, 2022 – Natural Gas Market Update | Gloomy weather today as the month of March leaves us like a lion. Energy markets continue to remain volatile erasing Tuesdays downward movement and once again moving futures higher by 4.5 % through to late 2023. A few key points to observe, when crude oil price moves upwards, we are seeing natural gas follow maintaining a spread between these two energy commodities. Traders are working to maintain the spread creating a delta whereby the market is remaining within a range. On the crude oil front, OPEC+, with the”+” being Russia, are meeting tomorrow to review the upcoming seasons scheduled production. The plan is to maintain the current production under the current conditions. And lastly, one of the energy pundits noted today that “we will not see relief from high energy prices until we see oil trading at $185 per barrel”. The pundit went on to say “until we can longer afford to drive the family minivan , price volatility will remain in place”. Crude oil retraced to $107 this afternoon. Take care and stay well. (RS)
March 29th, 2022 – Natural Gas Market Update | Cold morning once again and the sun is shining. Maybe the spring flowers are on the way. Markets were off today right through to 2023 by $0.20 USD/MMBtu due to the 14 day seasonal forecast. Good news for buyers to start participating in the lows when we do see them. Crude oil continues to climb to $116.00 per barrel based on lack of local supply. Natural gas will follow suit over time when the spreads become wide enough you will see speculators back into this market buying up Natural gas once again. Storage remains below the five year average and producers are still working with internal cash flow to fund projects. Until we see more certainty the market will remain bumpy. Buckle up! (RS)
March 28th, 2022 – Natural Gas Market Update | Waking up to -9 °C this morning was disheartening the say the least. The markets thought otherwise as we wind down the calendar in trading the April 2022 contract with a $0.09 USD/MMBtu decrease. Overall we continue to see a slow creep upwards in pricing well into the one year forward contracts. The European markets are starting to move away from scarce Natural Gas and started to pull the coal plants out of hiberation. Coal continues to remain the least carbon neutral product on the market. When the region is facing record high natural gas prices the market will react to whatever energy is competitive to replace Russian natural gas. Bundle up! (RS)
March 25th, 2022 – Natural Gas Market Update | Cool weather remains in the forecast for next week. Markets were somewhat lower on the day although not noticabley enough to move the market. The US and the EU is set to announce a deal for the US to supply Europe with more liquefied natural gas (LNG) but the near-term impact on gas prices is expected to be limited because US LNG production is already at full capacity. Crude oil reached a high of $116 today and Russia is considering payment for Natural Gas in exchange for Gold. Enjoy the weekend. (RS)
March 23rd, 2022 – Natural Gas Market Update | The markets continued to gain strength on the cool weather forecasts rising on average $0.10 USD/MMBtu across the curve until March 2023. In addition to the dynamic weather, the market remains jittery about potential supply disruptions from Russia. Crude oil move slightly higher today settling at $114.00 per barrel. Also, the macro view that the new sanctions from US/NATO/G7 where a commodity embargo could be the largest impacts on future markets, compounded with inflation and stronger than planned interest rate hikes. Not much room to move in todays markets. Stay dry. (RS)
March 22nd, 2022 – Natural Gas Market Update |The cooler weather is back into the 14 day forecast, with below seasonal temperatures for the North East. Even as the heating season comes to an end, we are still very much affected by short term cold spells. Natural Gas prices were up overall for most of the day increasing on average $0.26 USD/MMBtu higher right through into March 2023. Credit Suisse raised their prices targets recently to $4.00 USD/MMBtu for the balance of the years from $3.70 USD/MMBtu. Not sure how much weight to place on their estimate when the next twelve months are trading for an average of $4.92 USD/MMBtu. Crude oil oil traded at $112.00 per barrel today based on the potential of more sanctions by the EU on Russian crude oil production. Stay well. (RS)
March 21st, 2022 – Natural Gas Market Update | The sun is out along with warm weather. Natural gas markets were range bound once again within a $0.13 US/MMBtu movement. Based on the most current data, the speculators have moved on from this market to other commodities. The amount of speculative trades, versus the number of active commerical and small hedgers are well within balance. When natural gas markets move through the shoulder season can offer buyers the opportunity to buy in to protect from the upside. Liquid Natural Gas remains to be the common deliverable while Russian production is curtailed. With North American shipping facilities remain at maximum capacity, incremental natural gas supply exports will be limited. Crude oil continued to rise, currently trading at $111 per barrell. Stay well. (RS)
March 18th, 2022 – Natural Gas Market Update | The sun is out and warm weather is upon us. Natural Gas is not on most peoples mind as we move into the spring. Natural gas markets have moved within a $0.20 USD/MMBtu range all week trying to find either a resistance or breakout. The fundamentals remain the issue moving forward with lower than normal inventory from the past winter and the remaining tight supply/demand conditions remain. Crude oil remains at $104 USD per barrell this afternoon. Enjoy the sun and the warmer weather. (RS)
March 17th, 2022 – Natural Gas Market Update | Warm weather is back with the sun pouring in the window this afternoon; Perhaps winter is behind us. Natural gas markets are not celebrating the weather. Natural gas prices rallied, mainly predicated on the cooler weather over the first half of the month and a projection of seasonal temperatures in the central United States for the balance of the month. Benchmark natural gas rose for the most of the day up $0.19 USD/MMBtu. The continual push is mainly predicated on the uncertain of oil/gas supply while the oil sanctions remain on Russia. Long term projections are a shift of world wide supply away from Russia. Natural Gas inventories continue to remain 17% below last years levels and will remain a concern until we move into the end of heating season at the end of April. Crude Oil rallied back over $103.00 today, another rocky day for energy commodities. Take a walk and enjoy the spring sunshine. (RS)
March 16th, 2022 – Natural Gas Market Update | Natural gas markets rallied today by $0.19 USD/MMBtu based on the North American tight demand/supply. The overall sentiment in the oil/gas markets are the fact we have been operating within a very tight range for a number of years. Producers are unwilling to spend additional money for new development in light of the move to sustainable energy offers. We will continue to remain relatively volatile while we work through the future demand that could be upon us from Europe and Asia. An interesting commet came across my desk this morning noting in a single year 15 of the largest cargo ships produce the same amount of pollution as all the automobiles in the world. There are 90,000 cargo ships in operation today. Enjoy the balance of your day. (RS)
March 15th, 2022 – Natural Gas Market Update | Gentle snow falling from the sky. The early weather forecasts have been accurate this winter. Late start before the cold sets in mid January with a long drawn down winter expected to move on in early April. Thus far the forecast was relatively accurate for the winter of 2022. Crude oil is down to $95 per barrel down from last weeks high of $125. Russian oil is trading at $30.00 with the last 8 tankers of Russian crude oil expected to arrive later this month. That will certainly be welcome news for North American motorists. With the pressure on all commodites combined with inflation and low interest rates could prove to be significant equities correction. Natural gas remains range bound moving well within the same band all day, currently down 1%. European Liquid Natural Gas will continue to remain a catalyst for future price changes in North America. The EU are scrambing to source oil/gas supplies from any other country than Russia. The spring of 2022 will be very different supply/demand price forecast than last fall when meteoroligist predicted this gentle snow. Stay well ! (RS)
March 14th, 2022 – Natural Gas Market Update | That was a long cold weekend, it feels more like the start of winter not the end. The markets are swinging all over the past two weeks. An interesting comment from Nobel economist Paul Krugam noted “puzzled by the size of the price spike… [Russia] accounts for only 11 percent of the world production, whereas Persian Gulf producers extracted a third of the worlds oil back in the 70’s. Paul goes on to say “the world economy is much less dependent on oil than it used to be. Oil intensity – the number of barrels consumed per real dollar of gross domestic product – is half what it was in the 1970’s”. Russia is starting to sell crude oil at fire prices to India in order to retain cashflow. Natural gas closed down 1 % on the day while it continues to find the next event. Stay well! (RS)
March 11th, 2022 – Natural Gas Market Update |Spring forward this weekend. Oil and Gas markets remain relatively tight with a war premium included in the current market conditions. Due to cold weather in the midwest we did realize a 2% gain in the market at the time of writing. Some interesting analysis on Russia’s Liquified Natural Gas market share is relatively small at 6% of the global demand; 4% in the Altantic regions and 2% in the Pacific. Volume gains from other areas of the world will more than offset the production shortfall. Enjoy the weekend! (RS)
March 10th, 2022 – Natural Gas Market Update | Natural Gas market were up $0.11 USD/MMBtu on the April 22 contract. Traders view any movement above $ 5.00 is considered a break out to $5.25 and if the market declines below $4.51 we could see a low of $4.26. The market closed at $4.64 USD/MMBtu for the day . Take care! (RS)
March 9th, 2022 – Natural Gas Market Update | Natural Gas market were flat today with a $0.05 USD/MMBtu move down on the April 22 contract. Overall inventory continues to remain lower than last year and will be predicated on filling storage by November and a normal summer cooling season. Crude oil continues to remain strong with President Biden halting oil and gas imports from Russia relying on Canadian Crude oil production to fill the gap. Risk remains to the high side as we move through the balance of the month. Managing this market can be challenging, as one trader noted “It’s hard to read the label when inside the jar“. Could not have said it better. Enjoy the sun. (RS)
March 8th, 2022 – Natural Gas Market Update | Natural Gas market were down once again today although the actual physical gas market is not reacting as sharply. The interesting theme to watch is historically the markets would move up or down $0.06 USD/MMBtu in a normal trading day. Today the markets are moving $0.30 USD/MMBtu per day with the physical markets moving $0.05 per day. A well known international oil gas company presented their Natural Gas Monte Carlo Simulation outlook for the balance of 2022. Using 67% interval with Natural Gas prices will drop to a low of $2.67 to a high of 7.45 USD/MMBtu. Todays close was $4.53 USD/MMBtu. A famous Economist noted the following “Markets can stay irrational longer than you can stay solvent”. Hedging has advantages during these inflationary periods. Stay well. (RS)
March 7th, 2022 – Natural Gas Market Update | An interesting start to the week. The Nymex prices was off by $0.17 USD/MMBtu although the prices of the physical gas markets, namely Dawn (Enbridge) was up by $0.05 US/MMBtu on the same term. This clearly notes a divergence of opinion between the financial traders and the physcial traders view on the market. Physcial traders continue to be concerned about the actual physical gas supply in North America in the event we are caught in a supply squeeze. The financial traders are taking the opposite view. This in snapshot in time and will need to await more of a trend over time. Stay dry. (RS)
March 4th, 2022 – Natural Gas Market Update | What an end to a busy week! The prompt month April NYMEX Natural Gas Futures Contract climbed throughout the day into the 2:30PM settle to settle US$0.294/MMBtu up from yesterday. For the first time from exactly a month ago on February 4th, 2022, the prompt month contract surpassed five dollars, hitting a high of $5.045 for the day. Colder weather revisions for the 13th added significant demand which has prompted concerns over natural gas supply and demand balances. Recall that the month of March marks the End of Withdrawal for Natural Gas Storage, indicating that we will probably begin storage injections for April and beyond. The balance is an important number to gauge as it affects important decisions such as production and future prices through what’s available now. We’re currently trading within the higher range of prices, but with so much going on, while the price boundaries are up in the air, we do know that this plus-four dollar range will probably be the norm for some time. ~CL
March 3rd, 2022 – Natural Gas Market Update | North American natural gas prices traded within a narrow range most of the day without any real trends of note. The Eurpoean futures markets continues to trade up about 60% over the past week mainly due to potential supply disruptions. The UK banned Russian Liquid Natural Gas (LNG) from their ports accouting for 4% of the countries demand. In addition, the EU imports about 40% of their natural gas from Russia. One analyst noted today, Russia will start to move natural gas through China in exhange for Yuans due to the destruction of the Ruble displacing gas supply from North America and the Middle East. Crude Oil continues to remain in the $108 USD/Barrel range. On a good note the CAD did gain strength on the back of higher crude oil. Not much to celebrate, although a small win for the day. (RS)
March 2nd, 2022 – Natural Gas Market Update | Natural gas prices continue to remain bullish through to May 2023. The prompt month April 22 contract moved up from the opening by $0.37 USD/MMBtu, considered unprecedented movement at this point of the year. Cooler than normal weather has some affect on the market, although uncertain supply conditions continue to drive prices higher as their is a potential of a gas supply shortage in moving into the late summer and fall. Although these prices seem high, longer term trades are priced more favourably and will offer price protection for the long term. Looking back does not offer insight into the markets, looking forward is the best methodology in managing risk. (RS)
March 1st, 2022 – Natural Gas Market Update | The Russian and Ukraine talks concluded without any clear direction at this point. Crude oil futures continue to climb with a $2.70 USD spread into the April-May contracts. The US government is willing to release the petroleum reserves that will offer short term relief. In general oil production capacity remains tight across all markets. In the event Russian production is affected, Iranian production could meet some of the shortfall although as noted previously demand continues to outstrip supply. Natural gas prices remain bullish over the last few days increasing $0.19 US/MMBtu on the April 22 contract. Normally at this point in time we would witness prices softening as we exit the winter period. These are unprecedented times in the energy markets. Longer term trades are priced more favourably and will offer price protection for the long term. Stay well! (RS)
February 25th, 2022 – Natural Gas Market Update | Another interesting trading day in the shadow of events unfolding in Ukraine. We are trading the April 22 contract at this point with a forward view of the summer and fall months. Long term forecasts see March moving in like a lamb, with the 10 day National Weather forecast above or seasonal. Markets were off $0.14 USD/MMBtu from the open. All the best! (RS)
February 24th, 2022 – Natural Gas Market Update | What a busy day today marked! Not only was it another Energy Information Administrative (EIA) storage balance report release date, but also the expiry date of the NYMEX March futures contract. (As a high level explanation for those who may have questions about NYMEX and futures contracts, check out our post here!) The weekly Thursday storage report was released at 10:30AM today. While market analyst consensus came in at a withdrawal of 127 billion cubic feet (Bcf) for the week ending February 18th, 2022, the actual number was slightly larger at 129 Bcf. The resulting price impact was a slight climb to US$4.90/MMBtu before prices began to trend downwards once again. The Mar22 contract as a whole outside of this report saw quite the magnitude of up and downs today (although it can’t compare to what happened at the Feb22 expiry)! Hitting a high of $4.94 down to a low of $4.293, the contract ultimately settled $0.055 down from yesterday at $4.568. In the world of natural gas, March marks the last month of “winter,” a.k.a. withdrawal season, so look for breaks in trends as we roll to April, the “shoulder” season. Speaking of April, prices out to Mar23 are still trading five cents up, highlighting some of the ongoing concerns with the global natural gas supply. ~CL
February 23th, 2022 – Natural Gas Market Update | Markets will continue to trade the headlines, natural gas will continue to follow. Some traders believe the NYMEX could reach a high of $6.49 USD/Mmbtu based on the current market of $4.50 USD/Mmbtu. These are the times when hedging natrual gas supply will assist in cost certainty in light of the continued market uncertainty. As one of my economics professors would say ” see what you believe, not believe what you see”. Could not be more true! Enjoy. (RS)
February 22nd, 2022 – Natural Gas Market Update | Trust everyone enjoyed the high winds and long weekend to spend with friends and family. The energy markets continue to react to economic and geo political news. President Biden annouced financial sanctions on Russia and Germany are witholding shipping on Russia’s Norsk natural gas pipeline. Normally this would send shock into an already tight market. Although the effeciency of a commodites market has taken these risk premiums into account at the moment. It will be interesting to see if any future Russian production is affected. Markets were up $0.05 USD/Mmbtu for the March 2022 future contract. Stay dry. (RS)
February 18th, 2022 – Natural Gas Market Update | Happy (snowy) Friday yet again everyone! Quite the snowfall in the GTA with colder weather once again to match. On the topic of colder weather, model forecasts maintained fairly stable, with outlooks that the first of week of March will be the coldest since the first week of February. With that piece of information in mind, the prompt month March 2022 natural gas contract traded similarly to yesterday, hitting a high at the beginning of the day before backing off and settling US$0.055/MMBtu down from yesterday. The $4.40 resistance continues to hold and we will be watching to see where the upside potential lies. We hope everyone has a safe and warm Family Day Monday which the RiteRate office will be also observing. We will resume business next Tuesday, February 22nd, 2022, so until then! ~CL
February 15th, 2022 – Natural Gas Market Update | Natural Gas markets continue to be driven by ongoing increase in electricity demand; political unrest and snow in California! The meteorologists are noting day light is longer by 10 minutes each day and 3 minutes of additional sunlight as we slowly progress towards spring. One of our clients asked, “Why is Russia interested in Ukraine?” 25% of Russia’s natural gas productions flows through Ukraine into Europe and Ukraine maintains the tolling agreements; gas is considered a vital link to the Russian economy. Secondly the Russian economy is tied to the price of oil/gas commodites. More talk of invasions continues to move prices higher will ultimately benefit Russia. Markets reacted to to all of these events, pushing the March 22 contract up 7 % on the day. Some traders are starting to buy longer term to protect their budgets in the event the turmoil continues. Take care. (RS)
February 14th, 2022 – Natural Gas Market Update | Happy Valentine’s Day to everyone celebrating! To mark the occasion, today saw a rebound in the downward price trends we saw last week, with the March prompt month NYMEX natural gas contract settling US$0.254/MMBtu higher. Early weather volatility say an colder shift closer to near-normal, also equivalent to a 33 billion cubic feet (Bcf) demand figure in the Lower 48. In other news, the Olympics have been progressing as per usual with Canada’s medal count looking good at: 1 Gold, 4 Silver, and 10 Bronze. Also on the world stage, Russia impending invasion on Ukraine which may appear as soon as Wednesday, February 16th, 2022. While the Olympics don’t have much of an impact on natural gas, politics sure does. With as much as 40% of the European continent being supplied by Russia, international supply will play a key role if the source is cut off. The only difference this time around is that overseas prices on domestic gas probably won’t move as much. Coming out of 2020 and for much of early last year, liquefied natural gas (LNG) facilities were all heavily underused, so price movements in Europe and Asia markets helped to incentivize the return of volume being exported. This time around, most existing facilities are already operating above their nameplate capacity, so excess demand will only remain unfulfilled for the time being. That being said though, natural gas has really gone above and beyond what was believed possible, so make sure to tune-in daily to RiteRate’s Natural Gas Market Updates to stay in the know! ~CL
February 11th, 2022 – Natural Gas Market Update | Happy Friday everyone, what a way to round off the week! Natural gas prices continued to stay down, but relatively flat today with the March prompt month NYMEX contract settling US$0.018/MMBtu down from yesterday. At the time of writing, the contract was trading slightly under four dollars. Even though we’re expecting a cold weekend, the weather forecast revisions continue to run warmer, and prices will probably continue to trade within this range. Now is a great chance to capitalize on these lower prices to consider limiting your upside natural gas risk with our fixed-rate plans. Make sure to visit our website to view our offerings, or give us a call at 1-877-866-8056. ~CL
February 10th, 2022 – Natural Gas Market Update | Natural Gas markets were down $0.05 USD/MMBtu on the March 2022 futures contract. The move is largely based on the warmer weather forecasts over the next 14 days combined with a 268 BCF withdraw from storage. We continue to remain 393 BCF lower than the previous year balance at this point in the winter. Once we exit the month of February the market will have a better understanding of the actual inventory remaining and the amount of production available to meet the 2022/2023 heating season. Stay well. (RS)
February 9th, 2022 – Natural Gas Market Update | Natural Gas markets were active today, down 18% on the March 2022 contract settling at $4.01 USD/Mmbtu. Generally we are witnessing a large number of speculators trading natural gas over the past two months. Their ability to move large amount of money in and out of this market are clear indications of their intentions. The potential for Russia invading Ukraine continues to panic the market the balance fo the day. The longer term prices into the balance of 2022 are lower as well. It should be noted the market remains inverted whereby the Winter of 2023 continues to remain higher than the winter of 2022. Enjoy! (RS)
February 8th, 2022 – Natural Gas Market Update | Not much to note today. Markets continute to be range bound the entire day opening at $4.25 USD/MMBtu and settling down $0.04 on the close. Within the day the market was trying to test the high of $4.34 although buyers were not stepping in. Often a sign where the market is attempting to push higher although meeting resistance. Take care and stay safe. (RS)
February 7th, 2022 – Natural Gas Market Update | The weekend did prove to be another cold one. Downtown Toronto appears to be back to normal after the weekend activities. Markets are off most of the day with warmer weather starting to set in for the North America’s North East. Morgan Stanley published a report today projecting Nymex natural gas will average $3.75 USD/MMBtu, provided production remains stable. Today’s close was $4.29 USD/MMBtu for March 2022 futures contract. (RS)
February 4th, 2022 – Natural Gas Market Update | There was no lack of volatility this week, and this week it feels everyone should be awarded a star managing this market. The northeast and southwest cooled while other parts of North America warmed. Once the major cold shot passes the US demand could moderate over the next two weeks. Total Natural Gas demand overall was stronger at the first half of the winter season in relation to the prior years. In the event we continue to realize warmer weather prices should start to soften provided the balance of the winter remains below average. Enjoy another colder than normal weekend. (RS)
February 3rd, 2022 – Natural Gas Market Update | Happy Thursday everyone! The natural gas market has been feeling a little like being on a trampoline recently, bouncing up and down. Following the old saying what goes up must come down, the March 2022 prompt month NYMEX contract began it’s downward trend today, settling US$0.613/MMBtu down from yesterday. Prices falling were a result of weather forecast revisions, with the Euro run shifting significantly warmer for mid-February. Additionally, today marked another Energy Information Administrative (EIA) Lower-48 storage report. For those who may be new or unfamiliar, the EIA operates under the U.S. Department of Energy and is responsible for publishing the weekly storage balance. As storage is one of the main balancing factors between supply and demand, large variances from what market participants estimate usually leads to moves in prices. The industry average was a withdrawal of 279 Bcf, while the actual number came in at a withend
February 2nd, 2022 – Natural Gas Market Update | The second day of February is nothing like the first day. Cold weather forecasts continue to dominat the markets in the central and western regions of the continent and projected to dominate North America into the later part of February. North East and central natural gas production continues well freeze off resutling in less production and pushes short term prices higher. The March contract increased 14% in one day closing at $5.50 USD/MMBtu. Unless the market realizes some relief from this cold the market will continue to rally well into March. Keep warm. (RS)
February 1st, 2022 – Natural Gas Market Update | The first day of February and one of the warmest in recent memory. We did not see much action in the Natural Gas markets today, we are now trading the March 2022 futures without much activity. The Nymex settled at $4.66 USD/MMBtu, still higher than normal. Traders are now focused on inflation as the key driver of long term energy demand, with a few predictions in the 10 -12% range. Texas is expected to see a cold front move in over the balance of the week which could see a spike in short term demand. Wind generation does not operate well in severe cold weather resulting in short term natural gas demand. (RS)
January 31st, 2022 – Natural Gas Market Update | Natural Gas markets continue to rally based on the European Weather models forecasting cold weather well into February 2022. Based on the current demand North America consumed as much gas at this point in the winter season as we consumed all of Winter 2021. Prices were up $0.22 at the time of writing currently trading at $4.861 USD/MMBtu. It would be prudent to continue to considering longer term price options as we move through the next two months of winter. Take care. (RS)
January 28th, 2022 – Natural Gas Market Update | Happy last Friday of January everyone! Time continues to fly as we round out month one of the New Year, and what a month it has been! Following yesterday’s “crazy” action, the first day of the March 2022 NYMEX contract trading as the prompt month contract was just as wild. Trading to a high of US$4.876/MMBtu, the contract settled $0.356 up from yesterday’s settle. The bullish (upwards) momentum extended outwards all the way March 2023, with this contract up $0.154. A lot of cold is now on the horizon, with this week’s early chilly temperatures expected to last into the next few weeks. As our long time readers probably know by now though, there’s no such thing as a calm day in natural gas during the winter. Make sure to have a safe weekend, and join us again next week to see where we head next! ~CL
January 27th, 2022 – Natural Gas Market Update | Today is the last day of trading for the Feb 2022 Natural Gas future contracts. Under normal conditions the market will settle near the opening price. Not today. We opened the market at $4.83 USD/Mmbtu although in the last thirty minutes of trading for some unkown reason rallied up tp $5.90 USD/Mmbtu representing a 38% increase. In my 26 years of working in this industry , I have never seen the market rally this hard at a close. This is a clear indication that speculators are controlling this market not the end user market. Hedging a natural gas contract is like buying fire insurance, the day you need it the policy pays out. Turn down the thermostat and bundle up. (RS)
January 26th, 2022 – Natural Gas Market Update | Natural gas markets rallied hard out of the gate this morning up 8% from the opening. The fear is two fold; last day of trading is tomorrow and the EIA storage report could post a stronger than anticipated draw noting we have less gas supply for the balance of the winter. A combination of both along with tensions in Europe are creating a jittery market. One trader noted they foresee prices move higher into the fall of 2022 projected to be in the range of $5.50 – 6.00 USD/Mmbtu. The reasoning is producers need this price level in order to drill for additional natural gas and offer a fair return on investment to shareholders. We will see how the market unfolds the balance of the week. (RS)
January 25th, 2022 – Natural Gas Market Update | Markets are skiddish at this point closing at $4.05 USD/Mmbtu. We are up from yesterdays lows based on the continued cold weather and Biden assurance the US will supply Europe with Natural Gas in the event of a disruption. Normal weather patterns are projected to move in over the next week which could result is prices softening back under the $4.00 USD/Mmbtu mark. Southern Ontario is under a cold weather advisory for tomorrow once again. Stay well. (RS)
January 24th, 2022 – Natural Gas Market Update | More snow is falling upon us as along with colder than normal temperatures. Winter is hanging on a while longer than anticipated. At this point the overall net impact on storage remains neutral with the near term remaining relatively unchanged at this point. In comparison to the five year average we could realize lower than average inventory at the end of the winter. Still too early to make a call at this point. We did see the equities retreat to conservative investments including commodities. The Nymex settled $0.03 at $3.968 USD/Mmbtu noting a continued bearish sentiment. Stay warm, stay safe. (RS)
January 21st, 2022 – Natural Gas Market Update | The Feb 22 contract rebound $0.11/MMbtu off of yesterdays sell off. It is interesting to note the commercial hedgers ( end users) continue to remain short the balance of the winter and speculators are net long driving the market attempting to profit each day. Professional speculators are very aggressive and can move the market substantially day to day. No real pattern to their action, more of a price taker and normally are not taking title of physcial natural gas. Bundle up for another cold winter weekend. (RS)
January 20th, 2022 – Natural Gas Market Update | Natural Gas markets tumbled this morning based the fact traders are of the belief the EIA storage withdrawal would strong leaving excess gas on the system. The withdrawal was – 206 BCF well within the range although the market remained down $0.17 USD/M for the balance of the day. If the market remains down into the weekend we could see a trend to lower prices. Stay warm. (RS)
January 19th, 2022 – Natural Gas Market Update | Warm weather is upon us today although tomorrow will be cold once again. Natural gas markets were off today based on the normal weather patterns upon us into Feb 22. Winter is not done at this point, we have lots of cold weather upon us that could subject us to another market rally over the next few weeks. Janauary is forecasted to finish as the coldest since 2014. According to one trader natural gas prices will remain in the $3.50 – $4.00 range for the balance of 2022. The trader also noted the longer term prices remains favourable as a hedge against price volatility into the back end of 2022. Take care! (RS)
January 18th, 2022 – Natural Gas Market Update | Yesterday’s snow day noted our Canadian winters are back with a force! After two years of milder than normal winter, we have seen the full impact of the El Nina weather pattern with cold overnight temperatures and strong heating demand. These colder than average winter temperatures are well within the line of the 10 years normal thus far. Long term weather forecasts are calling for more mild temperatures in the north east that could result in decreased demand into mid February. Markets were trading relatively flat throughout the day. Take care and keep shoveling.(RS)
January 13th, 2022 – Natural Gas Market Update | Recent days have seen US natural gas prices rally significantly from just $3.92/MMBtu on Fridayto north of $4.80/MMBtu today – then a move down $0.606/Mmbtu after the storage withdrawal a move that not only represents a significant from the December into January 2022. This is the strongest part at this point in the year. The most recent rally is the result of winter if cold and seasonal temperatures have arrived. (RS)
January 12th, 2022 – Natural Gas Market Update | Gas futures were up for three straight days over the past week. Today’s closing of $4.732 per Mmbtu is the highest price we have seen since December 1, 2019. Colder than normal weather continues to add strength to the market, bearing in mind the past two winters were milder than normal. Weather experts called the winter of 2020/2021 to be average with cold weather intermittently throughout and above average snow. A noteworthy point, experts are calling for $100 per barrel crude by the summer to meet the strong transportation demand. Current prices are currently $82.72 per barrel. Hedging continues to offer price protection over the long term. Stay well! (RS)
January 11th, 2022 – Natural Gas Market Update | With the cold weather upon us the natural gas markets are starting to react with higher prices through the balance of the winter. Nymex is gaping up on the February 2022 contract, if we trade above the $4.06 USD/Mmbtu level then we could have set the bottom of the market last week. Keeping in mind, 15 cold days in a winter period is considered an above average winter demand. We still have time and could see the inventory draw down over the next three months. Stay warm. (RS)
January 7th, 2022 – Natural Gas Market Update | Happy Friday everyone! The prompt month February contract started the day slightly up from yesterday, before starting to trend upwards at around 9AM EST. The contract ultimately settled US$0.104/MMBtu higher, still in that high 80 low 90 range. Colder weather is projected to emerge over the weekend and into early next week, so we hope everyone stays safe and enjoys some time outdoors in the snow. Make sure to visit us next Monday, so we can check up on this prediction! ~CL
January 6th, 2022 – Natural Gas Market Update | Happy Thursday everyone! Today marked a rather flat trading day between a low of US$3.801/MMBtu and 3.931 before settling the day at 3.812. The U.S. Energy Information Administration’s (EIA) Lower-48 natural gas storage balance report was released today as per usual at 10:30AM. While the industry estimates ranged from a withdrawal of 27 billion cubic feet (Bcf) to 83 Bcf, the actual number came in at a withdrawal of 31 Bcf. Although this news is considered bearish, markets only fell to the low before rebounding. Although the daily trading ranges continue to stay quite wide, the bigger picture still appears rather stable with prices trading in the high three dollars. We will have to play the waiting game with the projected colder weather to see just how high prices can go. ~CL
January 5th, 2022 – Natural Gas Market Update | Not much activity in the markets today. Most traders are looking into the balance of the winter attempting to gauge if the current inventory will hold through to the end of April 2022. Often when a delayed start to winter could push demand into the latter part of the season causing supply issues in late March and April. At this point we have a few months to see where we stand. Western Canada continues to experience colder than normal temperatures creating some well freeze offs affecting production. (RS)
January 4th, 2022 – Natural Gas Market Update | Happy New Year! We started the year off with colder temperatures across Western Canada and into parts of Eastern Canada as well. Prices are somewhat reflecting on the colder weather, although until we have a more sustained weather patterns prices are subject to remain in the current trading range. The rule of thumb is more than 15 days of colder than normal temperature during a winter period will start to move prices upwards due to the limited inventory. Producers continue to operate in a climate of low capital expenditure and now sits below the levels needed to offset the current depletion rates. 2022 will be the year where natural gas prices slowly climb due to international prices pressure; lower than average inventory levels and lack of infrastructure spending. (RS)
December 23rd, 2021 – Natural Gas Market Update | North American natural gas markets were up $.25 USD/Mmbtu this morning based on the latest longer term weather forecasts. Once the storage withdrawal was announced, markets sold off slightly down $.15 USD/Mmbtu. The January 22 Nymex contract settles December 29 and will offer insight into traders view of the balance of the winter months. Interesting to note, the financial markets in oil/gas are not correlating to the physical price of the actual commodity. As of today the financial markets remains backwardated while the physical markets are inverse. The markets will eventually converge with the potential of a volatile winter market. Happy Holidays! (RS)
December 22nd, 2021 – Natural Gas Market Update | Good afternoon folks! Halfway through the week and Christmas is right around the corner. Natural gas futures have continued to rally upwards throughout Wednesday’s trading session, extending their momentum from the last two sessions. The price action today was fueled by two factors. Record levels of demand for LNG exports out of the Gulf Coast have been recorded since the weekend; 13.0 Bcf/day of natural gas is now being processed for export by LNG carrier tankers, up significantly year over year. Secondly, natural gas production has fallen below the 96 Bcf/day level after peaking at 97 Bcf/day in November. The additional demand in combination with a reduction of supply available has tightened the market’s supply and demand balance and briefly pushed the January 2022 contract above $4.00/MMbtu by mid-day. By the end of the session, however, the prompt month contract would gain $0.107 to settle just shy of this mark at $3.976. -EG
December 21st, 2021 – Natural Gas Market Update | Good afternoon everyone! We hope all our readers are enjoying the holiday season. Taking a look at the charts for natural gas futures prices, there has not been a significant enough factor to push prices far from the $3.80 MMBtu price level. Prices traded in a $0.20 wide range throughout the session, reaching as high as $3.947 and as low as $3.719 before settling $0.035 positive at $3.869 US/MMBtu. While near term temperatures are forecast to be seasonally mild for the next week and a half, weather models looking at the 11-15 day indicate the potential for chilly temperatures across most of the continent. Should this projection materialize, near dated natural gas contracts could see additional price support this week. -EG
December 20th, 2021 – Natural Gas Market Update | Good afternoon, folks and welcome back to another market update from the team at RiteRate. Natural gas markets rallied today as the January future contract was up $0.144 US/MMBtu from Friday’s settle. Price action traded in a range of $0.282 US/MMBtu as the prompt month contract reached a high of $3.924 and a low of $3.624. Current resistance can be seen near $4.066 US/MMBtu. Despite the rally, the market is still bearish as warm weather and an increase in production have put significant downward pressure on domestic prices. However natural gas prices internationally have rallied as the January Dutch TTF jumped more than 7%. This price increase was due to supply concerns in Europe, geopolitical tensions regarding Nord Stream 2 and very low levels of gas deliveries from Russia’s Yamal-Europe pipeline. Be sure to tune in tomorrow for our updates and coverage of the natural gas market from the RiteRate team. -HM
December 17th, 2021 – Natural Gas Market Update | Good afternoon, folks and welcome back to another market update from the team at RiteRate. The Natural gas market tumbled again as the January future contract was down $0.076 US/MMBtu from yesterday. Price action continues to show low volatility as the prompt month contract traded in a range of $0.197 US/MMBtu by reaching a high of $3.814 and a low of $3.617. Current support levels can be seen near $3.55 US/MMBtu however technical analysis gives a much more bearish outlook on prices. Weather model forecasts show colder temperatures in the east coast and warmer than average in the Midwest and parts of the south. The EIA reported that natural gas demand from power generators continues to be stable as they are using a larger share of natural gas to generate power compared to water from previous years. On a more international perspective, Russia has begun filling its second Nord Stream 2 pipe with gas as it expects regulatory approval despite current geopolitical tensions. Have a great weekend everyone. – HM
December 16th, 2021 – Natural Gas Market Update | Hello and welcome back to another natural gas market update from the team at RiteRate. After closing yesterday at $3.802, the prompt month natural gas contract for January 2022 spent most of Thursday’s trading session in positive territory before giving up gains going into the day’s settlement at 2:30PM EST. The contract made a high of $3.976 early in the morning before mid-day weather model runs sparked a sharp sell-off down to the day’s low of $3.729 US/MMBtu. The contract would ultimately settle at $3.766, down $0.036 from Wednesday’s settlement price. Price action throughout the morning was influenced by the release of the Energy Information Administration’s weekly natural gas storage report at 10:30AM EST. A slightly larger than expected withdrawal of 88 bcf added some bullish sentiment to the market, but was ultimately not enough to overcome bearish weather forecasts throughout the US and Canada for the next two weeks. -EG
December 15th, 2021 – Natural Gas Market Update | Good afternoon, folks and welcome back to another market update for the team at RiteRate. Natural gas markets rebounded slightly from yesterday’s decline as the January future contract was up $0.055 US/MMBtu from yesterday’s settle. Price action showed the prompt month contract trading in a range of $0.160 by reaching a high of $3.926 and low of $3.766. Current resistance can be seen near $4.066 US/MMBtu. Weather forecasts continue be warmer than average throughout the mid-west, south, and east coast. Traders now turn their attention towards tomorrow’s storage report. Analysts are expecting a withdrawal of 90 Bcf. On a more international perspective, the Dutch TTF January contract continues to increase on fears that Russia will decrease natural gas flows to Europe due to increasing geopolitical tensions. It will be interesting to see if international market news is able to impact domestic price action in the coming weeks. Be sure to tune in tomorrow for our updates and coverage of the natural gas market from the RiteRate team. -HM
December 14th, 2021 – Natural Gas Market Update | Good afternoon, folks and welcome back to another market update from the team at RiteRate. Natural gas markets tumbled again as the January future contract was down $0.047 US/MMBtu from yesterday’s settle. Price action showed the prompt month contract trading in a range of $0.154 US/MMBtu with a high of $3.84 and a low of $3.686. Current support level can be seen near $3.559 US/MMBtu. Weather patterns continue to put downward pressure on natural gas prices. The latest forecast shows warmer than average temperatures on the east and west cost of the U.S. Furthermore, the EIA reported that natural gas consumption fell 0.4% from the previous week due to weaker demand from every sector except power generation. Be sure to tune in tomorrow for our updates and coverage of the natural gas market from the RiteRate team. -HM
December 13th, 2021 – Natural Gas Market Update | The markets are relatively volatile the last few trading days. As we press into the holidays, traders are watching the 14 days weather forecast with no real pattern in sight. As one trade noted today, “we really do not start winter until January”, noted and watching! Another interesting viewpoint is the gradual price climb. Since December 6 the Nymex has moved up $0.34 USD/Mmbtu for the January 22 contract, during normal times this would be extraordinary. There’s plenty of time left for surprises for both supply and demand swings this winter. Keep the shovel ready. (RS)
December 10th, 2021 – Natural Gas Market Update | Natural gas prices finish the session as investors slowly re-establish positions after a weeks-long sell-off that ended Monday at a nearly five-month closing low. Mild weather continues cause havoc on the markets with an increase of $0.11 USD/Mmbtu increase on the January 22 Nymex contract. Colder temperatures are starting to arrive in some parts of the country, and traders believe priced uncertainty will remain until we have sustained cold weather. Long range forecasts are calling for another Polar Vortex in January 22 that could upend this entire market for the balance of the winter. Enjoy the warm weekend ahead. (RS)
December 9th, 2021 – Natural Gas Market Update | Good afternoon, folks and welcome back to another market update from the team at RiteRate. Natural gas prices were mostly flat today as the January future contract was down $0.001 US/MMBtu from yesterday’s settle. Price action continues to show low volatility as the prompt month contract traded in a range of $0.199 US/MMBtu. Prices reached a high of $3.924 and a low of $3.725. If prices go below the current support level of $3.559 US/MMBtu, it could result in a huge selloff with the price dropping to $3.16. The biggest news of the day was the EIA’s natural gas storage report. A net decrease of 59 Bcf was reported which was in line with analyst estimates. Working natural gas in storage is still 356 Bcf less than last year at this time and 90 Bcf below the 5-year average. On a more international perspective. The Nord Stream 2 pipeline has become a major foreign policy issue as Russia threatens to invade Ukraine. The Dutch TTF price could post a large spike if this happens as Germany and the U.S have threatened to block the pipeline unless Russia backs off. -HM
December 8th, 2021 – Natural Gas Market Update | Good afternoon, folks and welcome back to another market update from the team at RiteRate. Natural gas prices continue to climb up as the January future contract was up $0.107 US/MMBtu from yesterday. Price action shows the prompt month contract trading in a range of $0.208 US/MMBtu by reaching a high of $3.931 and a low of $3.723 The next resistance level will be seen near $4.075 US/MMBtu. The current weather outlook is still showing warmer temperatures as December heating demand has been much lower than expected. December temperatures continue to be one of the warmest in recent history. The markets are now looking towards the EIA storage report that will be released tomorrow. Analysts are expecting a storage withdrawal of 89 Bcf. It will be interesting to see how much of an effect this will have on price action moving forward. Be sure to tune in tomorrow afternoon for the results. -HM
December 7th, 2021 – Natural Gas Market Update | Good afternoon, folks and welcome back to another market update from the RiteRate team. Natural gas prices rebounded from yesterdays decline as the January future contract was up $0.051 US/MMBtu. Price action showed the prompt month contract traded in a range of $0.172 US/MMBtu by reaching a high of $3.829 and low of $3.6357. Current support can be seen near $3.563 US/MMBtu. Prices rebounded on an updated weather model forecasts which showed modestly cooler demand. Furthermore due to the recent drop in prices, there has been higher natural gas demand from the power sector. It will be interesting to see if traders buy up cheaper gas or if prices continue to sell off. Be sure to tune in tomorrow for our updates and coverage of the natural gas market from the RiteRate team. -HM
December 6th, 2021 – Natural Gas Market Update | Good afternoon, folks and welcome back to another market update from the RiteRate team. Natural gas prices continue to fall as the January future contract fell $0.475 US/MMBtu from last Friday. Price action shows the prompt month contract trading in a range of $0.256 US/MMBtu by reaching a high of $3.886 and low of $3.63. Technical analysis would show that prices have now reached oversold territory. Current weather conditions continue to put pressure on prices as temperatures in the Northeast are projected to be even warmer than expected. On a more fundamental perspective, recent news from the EIA shows that the U.S will become the worlds largest natural gas (LNG) exporter in 2022 once the Sabine Pass terminal and Calcasieu facility in Louisiana come online next year. Once this happens, LNG production capacity would reach 13.9 BCF/D which would surpass Australia and Qatar. This would be quite a bullish indicator for producers in the U.S – HM
December 3rd, 2021 – Natural Gas Market Update | Happy first Friday of December everyone! Hard to believe as Toronto remains a concrete jungle without a speck of white in site. I remember earlier on Monday speaking with someone from Calgary about finally getting some snow and potentially a white Christmas… On the note of weather, small adjustments continue to emerge between runs, with the overnight forecast bringing back a colder adjustment. The NYMEX January contract traded upwards from yesterday’s settle to a high of US$4.285/MMBtu but ended the day settling +$0.076 at $4.132. A warm December is still expected, at least for the next two weeks, but two cold shots are expected for December 7th and 13th. We’re still relatively early in the month of trading, but the Christmas holiday will cut significantly into the number of trading days for the month. If winter weather fails to emerge like the previous year, we will most likely see prices continue to trade within this lower range. However, production continues to stay stagnant with little room for growth, so any additional demand in the upcoming months will look to return prices to higher levels. Stay up to date with what’s to come by tuning back in with our daily updates next week, have a safe and warm weekend everyone! ~CL
December 2nd, 2021 – Natural Gas Market Update | The EIA storage number did not have much of an affect on the markets today withi a 59 BCF decrease. Nymex continued to fall settling the day at $4.06 USD/Mmbtu maily influenced by strong production in a weak demand market. In general the Nymex has fallen $1.30 over the 10 days making this an extraordinary move as we press into the Winter. As one trader noted today November and December are not really winter months. If January remains realtively warm than we could see new lows in the market moving forward. (RS)
December 1st, 2021 – Natural Gas Market Update | Nymex markets continue to sell off today, down $0.302 USD/Mmbtu on the close for the January contract. The next resistance level will be $4.25 USD/Mmbtu which is where we closed today. The market is selling off based on two items of interest. Firstly, the winter weather forecast declared a warm, wet, snowy winter with average temperature; a bit colder than last year. Second, the depth of the Omnicron spread worldwide and the potential affects to the North American economy. Tomorrow will be the weekly storage withdraw estimated to be 56 Bcf, well within normal. If price continue to remain weak could result in good buying opportunities. Stay dry, stay warm. (RS)
November 30th, 2021 – Natural Gas Market Update | Good afternoon, folks and welcome back to another market update from the team at RiteRate. The January futures contract was down $0.287 US/MMBtu from yesterday after breaking the $4.715 support level. Price action continues to be volatile as the prompt month contract traded in a range of $0.418 US/MMBtu by reaching a high of $4.90 and low of $4.482. Current resistance can be seen near $5.096 US/MMBtu. The main factor responsible for this selloff is the updated weather model forecasts. December temperatures are expected to be higher than average which would decrease heating demand. Furthermore, traders fear that the new Omicron Covid-19 variant might cause another wave of lockdowns that will significantly hinder industrial gas demand. Looking forward, it will be interesting to see if traders view this decline as an opportunity to buy cheap gas heading into winter. Be sure to tune in tomorrow for our updates and coverage of the natural gas market from the RiteRate team. – HM
November 29th, 2021 – Natural Gas Market Update | The US Thanksgiving must have come up short for Natural Gas traders. Today is the first day of trading the January 2022 contracts and the markets sold off $0.75 CAD/GJ of 11.4% down from the Friday close. Traders are taking the view the weather is not cold enough to warrant the higher than average prices based on the current market conditions. It is early to tell if this is a trend or more of a short term market correction. With only one day of trading into the month we will need to wait it out and see where the pattern holds into the balance. Enjoy your week ahead. (RS)
November 26th, 2021 – Natural Gas Market Update | Welcome to another Natural Gas Market Update with RiteRate! Time sure flies, as we have reached the last Friday of November. After the American Thanksgiving holiday yesterday, markets resumed full activity as some individuals looked to maximize settlement day for the December 2021 NYMEX contract. For those who are new or may have forgotten, today marks the last day of trading with December as the prompt month, before we transition to January 2022 next Monday. We usually see high volatility around the last few trading day, and today was no exception, with prices building overnight and continuing to climb throughout the day. The contract hit a high of US$5.562/MMBtu, before ultimately settling at $5.447. Throughout the majority of the trading day today, the December contract traded in par if not higher than the January contract, which earlier in the month had been trading at a ten cent premium. As we transition to trading January, we’ll be keeping a close eye on what’s known as the winter premium. As long as temperatures remain at or below the average, prices will continue to trend at current levels until we see a reversal. For the most up to date on where natural gas is going, make sure to continue tuning into RiteRate’s Natural Gas Market Updates on the daily! Have a safe and warm weekend everyone. ~CL
November 24th, 2021 – Natural Gas Market Update | Cold weather forecasts are on the minds of traders. While storage levels are typically their highest at this time of year, we are moving into the winter with 3% less storage than the average of the past five years. Perhaps not a significant amount, although the winter weather will advise that level otherwise. Today’s EIA storage withdrawal, the first of the season, was considered moderate at -21 Bcf. In layman’s terms consider taking a long drive in the car with a less fuel on board, knowing you need all of it to arrive at your destination. Any traffic, accidents or weather will delay your arrival and you may not have enough fuel to arrive. Fuel is much higher when you need to call for emergency back up. December 2021 contract rose $0.10 USD/Mmbtu to settle at $5.06USD/MMbtu. Normal pattern in this market; down Monday then up at the end of the week. Tomorrow is the US holiday, markets are closed and will be publish once again on November 26. Take care. (RS)
November 23rd, 2021 – Natural Gas Market Update | December 2022 futures contract continued to trade range bound for most of the day. The start of the day the market traded down for most of the morning. The later half of the day markets rebounded by $0.30 USD/Mmbtu by the end of day – up 5.3 % overall. With the shorter than average trading week, the markets will remain volatile into tomorrow prior to the US Thanksgiving holidays. President Biden could announce later today the release of 9 million barrels of crude into the market. This would temporarily relieve short term supply pressure although will remain short lived without sustained long term oil/gas production. That is it for today, enjoy the evening (RS)
November 22nd, 2021 – Natural Gas Market Update | This weeks trading will be limited due to the US Thanksgiving holiday. As a result, trading was off today in anticipation of the short week. Markets are selling off at the start of the week then seem to rebound from Tuesday to Thursday; unsure although this is a pattern we have witnessed over the past few months. Weather continues to play into the market with average temperature continue to across most of North America. Europe and Japan are expected to annonce their joint release of oil stockpiles held in storage. This will affect the oil markets for a short period of time although we need to see prolonged production increase month over month. The January 22 natural gas contracts holding support based on the 100 day moving average. We are seeing resistance at $5.60 USD/Mmbtu meanwhile the contract is trading $4.68 at the time of writing. Short week, watch for the market activity. Too bad the Leafs winning streak broke down over the weekend. (RS)
November 19th, 2021 – Natural Gas Market Update | The market continues to look ahead into the cold dark winter months as to where the price levels will settle. Based on the current LaNina the North East could experience a blast of cold weather through January 2022 then tapering to normal winter conditions thereafter. With the current natural gas production down almost 8% from last year, we could see natural gas prices spike to $30.00 USD/MMbtu, prices similar to the European markets a few weeks ago. This market is not over and we could experience extreme volatility over the next few months. The next short term resistance level is $5.60 USD/Mmbtu for the December 21 Nymex contract. If prices move past that level we could see price move up to $6.10 USD/Mmbtu. Enjoy the weekend and cheer for the Leafs vs Penguins game. (RS)
November 18th, 2021 – Natural Gas Market Update | Good afternoon, folks and welcome back to another market update from the RiteRate team. The December natural gas futures contract was up $0.086 US/MMBtu from yesterday and settled at $4.902. Price action showed the prompt month contract trading in a range of $0.202 US/MMBtu by reaching a high of $5.032 and low of $4.830. Prices are trading between the current support level of $4.781 US/MMBtu and resistance level of $5.394. The biggest news of the day was the EIA’s weekly storage report. A net increase of 26 BCF from the previous week was shown. These results were in line with analyst estimates. Working gas in storage is still 310 BCF less than last year and 81 BCF less than the five-year average. However this should be enough to supply the upcoming winter demand based on current weather projections. The markets did not find this news favorable because it is uncommon to still have gas injections during this time of the year. Looking forward, it will be interesting to see if the increase in power generation from wind continues to put downward pressure on natural gas prices. – HM
November 17th, 2021 – Natural Gas Market Update | Good afternoon, folks and welcome back to another market update from the team at RiteRate. The December futures contract was down $0.361 US/MMBtu from yesterday and settled at $4.816. The prompt month contract traded in a range of $0.365 US/MMBtu by reaching a high of $5.165 and low of $4.800. Weather continues to be the main driver of prices heading into this winter as October and November have been warmer than average. January is expected to be the coldest month this winter and thus will be responsible for majority of the heating demand. Moving forward, the market will be closely watching production as the supply chain crisis could derail an increase in production that is expected in the current bull market. Be sure to tune in tomorrow for our updates and coverage of the natural gas market from the RiteRate team. -HM
November 16th, 2021 – Natural Gas Market Update | Good afternoon, folks and welcome back to another market update from the team at RiteRate. Natural gas markets continue to rebound as the December futures contract was up $0.16 US/MMBtu from yesterday’s settle. Price action traded in a range of $0.37 US/MMBtu by reaching a high of $5.394 and low of $5.024. Current resistance can be seen near $5.23 US/MMBtu. The weather models are forecasting cooler temperatures on the west coast of the U.S, however analysts are expecting an additional increase in gas inventories. From an international perspective, LNG prices soared in Europe on news that German regulators have suspended approval of the Nord Stream 2 pipeline. This caused the December Dutch TTF contract to surge over 17% today. It will be interesting to see how much of an impact this news has on domestic prices. Be sure to tune in tomorrow for our updates and coverage of the natural gas market from the RiteRate team. -HM
November 15th, 2021 – Natural Gas Market Update | Good afternoon, folks. Hope everyone had a great weekend. Natural gas futures were up today as the December futures contract posted a gain of $ 0.226 US/MMBtu from Friday’s settle. The prompt month contract traded in a range of $0.394 US/MMBtu by reaching a high of $5.062 and low of $4.731. Prices continue to remain above the support level of $4.72 US/MMBtu. The main driver of current prices are weather model forecasts. It is reported that The Global Forecast System (GFS) and European Centre for Medium-Range Weather (ECMWF) are both diverging in their predictions. However the markets have priced in normal to cooler temperatures for the upcoming weeks. Be sure to tune in tomorrow for our updates and coverage of the natural gas market from the RiteRate team. -HM
November 12th, 2021 – Natural Gas Market Update | Happy Friday everyone. The December natural gas futures contract was down $0.358 US/MMBtu from yesterday and settled at $4.791. Prices traded in a range of $0.389 US/MMBtu by hitting a high of $5.141 and low of $4.752. The new resistance price can be seen near $4.95 US/MMBtu. The natural gas market was down significantly this week due to a variety of factors, both domestic and international. This week’s selloff was primarily caused by resumed Russian gas flows to Europe in addition to a bearish storage report from the EIA. Looking forward, it will be interesting to see if prices rally back above $5.00 US/MMBtu once we get additional information about temperatures this winter. Be sure to tune in to our updates next week for more coverage of the natural gas market from the RiteRate team. -HM
November 11th, 2021 – Natural Gas Market Update | Good afternoon, folks and welcome back to another market update from the team at RiteRate. Today is Remembrance Day and we would like to remember and say thanks to all the armed forces members who have passed away or currently serving in the line of duty. The natural gas market rebounded today as the December futures contract was up $0.269 US/MMBtu from yesterday’s settle. Price action continues to show some volatility as the prompt month contract traded in a range of $0.287 US/MMBtu by hitting a high of $5.176 and low of $4.889. Despite the rally, prices failed to break past the resistance level of $5.34 US/MMBtu. Even though yesterday’s storage report came in below analyst estimates, the market still views this as a bearish indicator since U.S working gas in storage is only 3.2% below the 5-year average. Today’s rebound was mainly due to traders taking advantage of an oversold market and trying to buy up gas for prices below $5.00. Looking forward, expect delivery volumes of Russian gas and weather forecasts to have a significant impact on market prices. Be sure to tune in tomorrow for our updates and coverage of the natural gas market from the RiteRate team. -HM
November 10th, 2021 – Natural Gas Market Update | Good afternoon, folks and welcome back to another market update from the team at RiteRate. The natural gas market continued to extend its losses from yesterday. The December futures contract was down $0.099 US/MMBtu from yesterday and settled at $4.880. The prompt month contract traded in a range of $0.321 US/MMBtu by reaching a high of $5.046 and low of $4.725. The new resistance is seen near $5.34 US/MMBtu which is close to the previous support price. Today’s price decline was due to updated weather models that are forecasting warmer temperatures and lower weather driven demand in the United States. Additionally, the EIA storage report showed a storage build of 7 BCF which was just shy of analyst estimates. The market outlook is currently heavily dependent on weather forecasts as fundamental factors show that the U.S has enough gas in storage to supply current demand. Looking forward, it will be interesting to see if traders start buying again to take advantage of prices dipping below $5.00 US/MMBtu or whether this selloff continues. Be sure to tune in tomorrow for our updates and coverage of the natural gas market from the RiteRate team. -HM
November 9th, 2021 – Natural Gas Market Update | Happy Tuesday folks. Welcome back to another market update from the team at RiteRate. The December natural gas futures contract was down $0.448 US/MMBtu from yesterday and settled at $4.979. Price action showed significant volatility as the prompt month contract traded in a range of $0.557 US/MMBtu by hitting a high of $5.467 and a low of $4.910. Current resistance is near $5.33 US/MMBtu. Prices were down today on news that Russia has resumed natural gas flows to Europe, which should help alleviate some of the supply shortages. Natural gas demand is expected to be lower over the next two weeks due to higher power generation from wind and nuclear energy sources. Looking forward, the EIA will publish the results for its weekly storage report a day early as Thursday is Veteran’s Day. Tomorrow marks the last day of gas injections and analysts are expecting a storage build of 7 BCF. Be sure to tune in tomorrow afternoon for the results. -HM
November 8th, 2021 – Natural Gas Market Update | Good afternoon, folks. Hope everyone had a great weekend. The December natural gas future contract was down $0.089 US/MMBtu from yesterday’s settle. The prompt month contract traded in a range of $0.283 US/MMBtu by hitting a high of $5.663 and low of $5.38. The new resistance level is at $5.63 US/MMBtu which is near the 10-day moving average. Prices were down due to mixed weather forecasts in the U.S in addition to an increase in supply. The EIA reported that average total supply of natural gas rose 0.1% from the previous week. Higher dry gas production is the main driver of this additional supply. Despite bearish indicators in the U.S, international markets continue to struggle with supply shortages. The December contract for Dutch TTF rose over 6% on concerns that Russia has yet to increase gas supply to Europe. Looking forward, it will be interesting to see if Putin follows through with is comments about easing the natural gas supply shortage in Europe. Be sure to tune in tomorrow for our updates and coverage of the natural gas market from the RiteRate team. -HM
November 5th, 2021 – Natural Gas Market Update | Happy Friday everyone The December natural gas futures contract was down $0.20 US/MMBtu from yesterday’s settle, however prices were up overall this week from Mondays open. Intraday price action showed the prompt month contract reaching a high of $5.760 US/MMBtu and low of $5.501. The drop in the futures contract was due to news that the United States is expected to have warmer weather over the next two weeks. U.S natural gas demand rose 5.7% this week based on data from the EIA. The increase was driven by higher demand in the residential and commercial sector. To recap the biggest news of this week, the storage report showed a build of 63 BCF which was in line with estimates. The markets see this as a bearish indicator despite working gas storage levels being below the 5-year average. Looking forward, expect increased production to put more downward pressure on prices. Be sure to tune in next week for our updates and coverage of the natural gas market from the RiteRate team. -HM
November 4th, 2021 – Natural Gas Market Update | Good afternoon and welcome back to another market update from the team at RiteRate. Another exciting day for the natural gas market. The December natural gas future contract was up $0.46 US/MMBtu from yesterday’s settle. Intraday price action showed the prompt month contract trading in a range of $0.341 US/MMBtu as prices hit a high of $5.876 and a low of $5.535. Resistance continues to be seen at $5.24 US/MMBtu which was the previous high price point in October. The rebound in prices was due to colder weather forecasts in the northern tier of the United States which is expected to increase heating demand. Moving on to the biggest news of the day, the EIA reported a storage build of 63 BCF which was in line with analyst estimates. Despite this increase, working natural gas in storage is still 101 BCF below the five-year average. Looking forward, price action could see higher volatility as we head into the winter. Be sure to tune in tomorrow for our updates and coverage of the natural gas market from the RiteRate team. -HM
November 3rd, 2021 – Natural Gas Market Update |Good afternoon, folks. The December natural gas future contract was up $0.128 US/MMBtu from yesterday settle. The prompt month contract traded in a range of $0.340 US/MMBtu by hitting a high of $5.895 and low of $5.465. Support can be seen near the 50-day moving average of $5.24 US/MMBtu. Natural gas prices have recovered majority of the losses posted earlier this week. The recent rebound in prices can be attributed to traders buying up futures contracts to take advantage of the recent dip in prices. Looking ahead to tomorrow’s EIA storage report, analysts are expecting a storage build of 63 BCF, which would represent an increase from the storage build reported the same time last year. It will be interesting to see how much of an effect this will have on prices action tomorrow. Be sure to tune in tomorrow afternoon for the results. -HM
November 2nd, 2021 – Natural Gas Market Update | Good afternoon, folks. Natural gas futures were up $0.356 US/MMBtu from yesterday’s settle as natural gas bounced back from being in oversold conditions. Prices retraced most of the losses incurred yesterday due to a colder weather forecast. Price action traded in a range of $0.359 US/MMBtu as the prompt month contract reached a high of $5.565 and tested support near $5.20. The EIA reported that U.S natural gas consumption decreased in 2020, due to various factors such as mild weather, and a decrease in demand due to Covid -19 restrictions. However these low prices resulted in a record high level of natural gas exports and an increase in demand for power generation. Looking forward, the market will pay close attention to this week’s storage report as it is expected to show an increased storage build due to the mild weather this past month. Be sure to tune in tomorrow for our updates and coverage of the natural gas market from the RiteRate team. -HM
November 1st, 2021 – Natural Gas Market Update | Natural gas futures lost ground for another consecutive session, falling significantly over the past few days. Declining European natural gas demand is the main culprit as is the warmer than average fall we are experiencing. Mild temperatures will persist for the next 14 days, although the winter weather is expected to arrive late November. This is common as we move through the seasonal swings into the winter months. At this time, it is too early to tell if this is an anomaly or a long term pattern, but we will have a better forecast in the weeks to come. (RS)
October 29th, 2021 – Natural Gas Market Update | Good afternoon, folks. Hope everyone is excited for Halloween this weekend. The December future contract was down $0.436 US/MMBtu from yesterday’s settle on news that Russia will soon start shipping gas to Europe to ease their shortfall. Price action for the prompt month contract traded in a range of $0.436 US/MMBtu and hit a high of $5.836 before settling at $5.426 for the day. Natural gas markets look to end the week lower as the weekly storage report and international news continue to put downward pressure on prices. The recent storage build which came in at 87 BCF was in line with estimates. However supply remains tight as total working gas in storage is 458 BCF lower than this time last year and 151 BCF lower than the five-year average. Moving forward we will be paying close attention to the weather as any decrease in temperature forecasts could push prices above the $6.58 US/MMBtu resistance mark. Be sure to tune in to our updates next week for more coverage of the natural gas market from the RiteRate team. -HM
October 28th, 2021 – Natural Gas Market Update | Happy Thursday everyone. Today marked the first day of the December futures contract acting as the prompt month futures contract. Although the prompt month contract only settled $0.049 US/MMBtu higher than yesterday, it was down $0.42 from the November contract settle. This drop is normal as we transition our focus towards a new contract month. Prices have the possibility of going much higher if they were to break the $6.50 US/MMBtu resistance mark. This could happen if weather forecasts are revised to show colder temperatures. Today’s EIA storage reports a storage build of 87 Bcf. Although this was spot on with analyst estimates, it did little to stop the downward price movement caused by the transition towards a new prompt month contract. U.S natural gas consumption is set to increase as demand rose by 1.9% compared to the previous week. The markets see this as a bullish indicator as we exit shoulder season. Looking ahead, prices continue to remain sensitive to the weather as supply remains tight. Be sure to tune in tomorrow for our updates and coverage of the natural gas market from the RiteRate team. -HM
October 27th, 2021 – Natural Gas Market Update | Good afternoon and welcome back to another market update from the team at RiteRate. The November futures contract posted a gain of $0.32 US/MMBtu from yesterday’s close and settled today at $6.202. Price action continues to remain volatile as the prompt month contract prices traded in a range of $0.521 US/MMBtu by reaching a high of $6.291 and low of $5.770. With today marking the last day of trading for the November futures contract, traders will now turn their short term focus on to the month of December. The recent price surge is due to an updated weather forecast which expects cooler temperatures over the next 10 days, however November weather is still expected to remain mild. Be sure to tune in tomorrow for the latest updates and commentary on natural gas market developments. -HM
October 26th, 2021 – Natural Gas Market Update | Good afternoon and welcome back to Canadian RiteRate’s natural gas market update. Natural gas futures prices plummeted early Tuesday morning after posting significant gains during Monday’s trading session. The November futures contract, set to expire tomorrow, traded as low as $5.95 US/MMBtu before making a intra-day recovery back towards yesterday’s settlement of $5.898. The contract would ultimately lose just $0.016 during today’s session, nearly unchanged day-over-day despite trading in a $0.50 range. The balance of winter contracts between December 2021 and March 2022 would drop about $0.06 on average, a modest pullback after appreciating $0.56 yesterday.Overnight weather model runs confirmed the colder shift in 15-day forecasts that sparked yesterday’s rally. Over the next two weeks, temperatures will drop just below historically average values across the nation, directly increasing the demand for natural gas in those regions. It is clear that any potential for cold air to develop will cause a sharp price increase in this already tightly supplied market. With storage inventories below normal levels and a significant portion of natural gas production being exported to Mexico or to overseas markets as LNG, any additional weather-driven demand will serve as a bullish catalyst for this market to run even higher. -EG
October 25th, 2021 – Natural Gas Market Update | Happy Monday folks! We hope all our readers out there enjoyed their weekend. Natural gas futures have staged an intense rally to start off the week. The November futures contract surged $0.618 US/MMBtu (+11.7%) to settle at $5.898 and the rest of the winter contracts followed suit. Contracts out to 2023 would see double digit gains and all other contracts out to 2030 would settle in the green as well. Over the weekend, weather model projections shifted colder in their 15-day outlook, adding as much as 26 Bcf of natural gas demand in that time-frame. As we draw nearer to the start of the winter heating season, changing weather forecasts indicating more or less demand become the primary driver of market price movement. Traders will also be keeping a close eye on production levels to see if higher price levels begin to incentivize additional oil and gas production. With November options and futures contracts expiring tomorrow and Wednesday, we expect volatile price action and double digit price swings to continue into the end of the month. Be sure to tune in here for the latest coverage and commentary from the team at RiteRate. -EG
October 22nd, 2021 – Natural Gas Market Update | Happy Friday everyone! Today was quite an exciting day for the natural gas market. Changes in overnight weather model forecasts have projected cooler temperatures in their 15 day outlook, driving up natural gas prices for the upcoming winter. By the end of the session, the November contract gained $0.165 US/MMBtu over yesterday’s settlement to close at $5.280. Price action was not particularly volatile today as the front month November 2021 contract traded in a range of $0.258 US/MMBtu, hitting a high of $5.379 and a low of $5.379. The ongoing supply crunch that has driven up prices around the world is a result of high demand from international markets combined with inadequate domestic production growth. A contributing factor to high prices has been the lack of investment in the oil & gas sector over the past few years. As a result, it has been increasingly difficult for industries to switch over to other fossil fuels despite the significant rally in natural gas prices. Total rig count, an indicator of domestic natural gas production, implies that supply growth is not on pace to keep up with demand. This shows that oil & gas companies are more reluctant to invest in additional production and would rather save any cash or pay down debt. It remains to be seen what price level will incentivize oil & gas producers to significantly increase production. While we can’t foresee the future, we will make sure to keep you updated on fundamental and technical factors influencing natural gas prices each and every day. Be sure to tune in here Monday through Friday for the latest coverage and commentary from the team at RiteRate. – HM
October 21st, 2021 – Natural Gas Market Update | Good afternoon, folks. Another relatively calm day in natural gas markets. Natural gas November futures contracts were down $0.055 US/MMBtu from yesterday and settled at $5.115. Prices traded in a range of $0.21 US/MMBtu and hit a low of $5.006 after todays EIA report. The EIA reported a storage build larger than market expectations of 90 Bcf. A build of 92 Bcf was injected into storage during the previous week. Prompt month futures contracts have come down from previous highs despite cooler temperatures this week as weather forecasts for the coming month are expected to remain mild. The reduction in prices also comes as traders seek to sell their contracts and lock in profits. Markets expect prices to remain above the support level of $4.91 MMBtu. Looking forward, it will be interesting to see how global supply crunches this winter will impact domestic markets.
October 20th, 2021 – Natural Gas Market Update | Good afternoon folks, welcome back to another market update from the team at RiteRate. After settling $0.099 in the green yesterday, natural gas futures contracts sold off in the early morning before finding support at the 50-day moving average of $4.90. The November contract dipped as low as $0.18 before staging a mid-day rally to the $5.20 price level, indicating that traders continue to see value buying at these prices. The prompt month contract ultimately settled up $0.082 US/MMBtu to close at $5.17 for the session. Weather forecasts for the next 15 days continue to call seasonally comfortable temperatures across much of the United States and Canada, limiting the call on natural gas for heating or electricity generation. The loosening of market fundamentals will result in larger injections of natural gas into storage, somewhat easing concerns that inventories will be inadequate this winter. However, we emphasize the significant upside potential for natural gas prices should winter temperatures be colder than the last 10 years on average. -EG
October 19th, 2021 – Natural Gas Market Update | Welcome back to RiteRate’s natural gas market update for Tuesday, October 19th, 2021. After two consecutive sessions of closing in the red, natural gas prices for the November 2021 contract found support at the 50-day moving average price level between $4.90 and $5.00 US/MMBtu. The winter contracts between November and March moved up by about $0.11 on average, while the summer contracts from April 2022 onwards were largely unchanged day over day. Near-term weather demand forecasts continue to show warmer-than-normal temperatures across much of the continental United States and Canada, but any surge of cold in the early weeks of November could quickly spark a rally back to the $6.00 price level. -EG
October 18th, 2021 – Natural Gas Market Update | Happy Monday. Hope everyone had a great weekend. Another tough day for natural gas. November natural gas futures contract prices were down $0.421 US/MMBtu and settled at $4.989. Futures contract prices were sub $5.00 US/MMBtu for the first time since September 24th,2021. Volatility continues to run high as the prompt month contract traded in a range of $0.408 US/MMBtu by reaching a high of $5.37 and a low of $4.962. Prices are on the downtrend as the weather is expected to stay mild in October and early November. Moving forward prices are expected to test the next support level of $4.75 US/MMBtu. Dutch TTF contract prices continue to post gains as Europe faces a supply crunch going into the winter. This is due to European natural gas inventories being down from normal levels. Furthermore Gazprom did not book additional capacity on its pipelines that transport gas to Europe. While European prices continue to trend upwards, it will be interesting to see what happens in North American Markets. -HM
October 15th, 2021 – Natural Gas Market Update | Good afternoon, everyone. Welcome back to our market update to round out the week. The November natural gas futures contract settled at $5.410 US/MMbtu, down $0.277 from the previous day’s close. Price action continues to remain volatile as the prompt month contract’s prices traded in a wide range of $0.387 US/MMbtu, hitting an intraday high of $5.789 and low of $5.402. Traders are still bullish after yesterday’s EIA storage report came in below estimations. However, prices have retraced the gains made yesterday due to a weather outlook that forecasts a warmer than expected fall. We are just a few weeks away from the start of the winter heating season, so don’t expect these prices to stay in this range for long. An increase in the odds of a cold and stormy winter across the Northern tier of the United States could push prices up to or above the $6.112 resistance mark. -HM
October 14th, 2021 – Natural Gas Market Update | Happy Thursday everyone. Today was another exciting day in the natural gas market. The November natural gas futures contract settled at $5.687 US/MMBtu, up $0.097 from yesterday’s close at $5.590. The prompt month contract traded in a range of $0.360 US/MMBtu and hit an intraday high of $5.964 and low of $5.604. At 10:30AM EST, the U.S Energy Information Administration reported a storage build lower than market expectations of 85 Bcf, causing an immediate rally upwards of $0.15 US/MMBtu. This storage build may have caught some market participants off guard as October 2021 has had some of the warmest temperatures of the past 10 years. From an international perspective, high natural gas prices in Europe are causing many companies to consider switching to less costly fuel alternatives like coal and oil; however, the market is overestimating the amount of coal and oil that can be substituted for natural gas in the short run due to various environmental, logistical, and supply issues. The increased cost of switching to other fossil fuels is causing the natural gas market to become even more inelastic. This inelasticity will increase further as European and North American markets accelerate the transition towards renewables. Looking forward, Asian demand for LNG will be of growing importance in the coming years. Based on these factors the market is not expecting prices to drop significantly in the short-term future. -HM
October 13th, 2021 – Natural Gas Market Update | Happy Wednesday everyone! It may be another cloudy day outside, but natural gas markets continued to be anything but boring. Although the November natural gas contract initially fell following yesterday’s settle, they rebounded after hitting US$5.35/MMBtu and continued to test this price overnight. At 8:30AM EST today, the contract hit an early high just above US$5.50/MMBtu before trending down to meet resistance once again at $5.35. After reaching this point, markets reversed and have been trending up steadily since 10AM EST. The November NYMEX contract settled at US$5.59/MMBtu today, up eight and a half cents from yesterday. At the time of writing slightly before 4PM EST, the contract is trading almost another five cents over today’s settlement price. Overall, we are quite far off from the October 5th $6.40 price high, but still continue to trade within a range of 70 cents between $5.15 and $5.85. As mentioned yesterday, global market tightness continues to drive domestic prices up as limited supply heads overseas to fill the ongoing natural gas storage deficit abroad. Speaking of storage, tomorrow marks another Energy Information Administration Lower-48 natural gas storage report. For any new readers, this is the official report that shares what natural gas storage inventory builds currently look like. Storage builds are used to balance the extra demand for natural gas during the cold winter months. Released at 10:30AM EST every Thursday, this information offers new or expected information to traders, which may lead to significant price swings or barely any movement, as was the case for the past few weeks. Make sure to tune-in tomorrow to hear our breakdown on this week’s report and what happened throughout the day! ~CL
October 12th, 2021 – Natural Gas Market Update | Happy Thanksgiving from the RiteRate team! We hope everyone who celebrated the holiday over the weekend had a lovely time with friends and family. Taking a look at the natural gas market today, futures contracts fell as low as $5.168 intraday before rallying off support levels to close out the day $0.160 over Monday’s settlement price. The appreciation of 3.0% had the November prompt month contract settle at $5.505 US/MMBtu. This afternoon’s weather model runs highlighted the potential for cooler than previously expected temperatures in their 15 day forecasts, elevating demand in key gas-consuming regions. Previous weather forecasts for the remainder of October had suggested that a mild demand outlook for this time period would lead to larger storage builds and put pressure on natural gas prices. While North American natural gas storage inventories are lagging behind the 5-year average for this time of year, concerns are easing that there will be inadequate supplies for domestic consumption. Elsewhere in the world, the situation is more grim. Businesses and industries in Europe and Asia have already begun to reduce or cease their operations in response to higher operating costs. European storage inventories sit about 15% below normal, stoking fears that there may not be enough fuel to heat homes and businesses if extremely cold weather manifests. -EG
October 8th, 2021 – Natural Gas Market Update | Good afternoon folks! Welcome back to our market update to round out the week. In a rather uneventful trading session on Friday, natural gas futures for the upcoming winter fell about $0.10 US/MMBtu as traders wait for the next major catalyst that will determine price direction. Contracts beyond March 2022 appreciated slightly despite the bearish price action at the front of the futures curve. Next week, market participants will be keeping a close eye on the global energy market situation in Europe and Asia. Upwards price pressure in these markets has been spilling over into North America since severe weather greatly depleted natural gas storage inventories over the previous winter. -EG
October 7th, 2021 – Natural Gas Market Update | Good afternoon and welcome back to RiteRate’s Thursday afternoon market update. Taking a look at the settlement change day-over-day, one would suspect that it was a quiet day in natural gas markets. The November futures contract gained just $0.002 by the end of the trading session, but traded in a $0.442 range, making an intraday high of $5.835 and a low of $5.393. Volatility is rife within the market and it has been become common to see price movements 5-10% up or down. The EIA reported a storage build larger than market expectations of 105 Bcf. A build of 118 Bcf was injected into storage during the previous week. Although price action responded bearishly within the first 10 minutes following the publication, prices would slowly recover early morning losses to settle very close to unchanged day over day. -EG
October 6th, 2021 – Natural Gas Market Update | Good afternoon folks! Happy Wednesday to all our readers out there. After adding $0.546 US/MMBtu to settle at $6.312 on Tuesday, the November natural gas futures contract gave up all its gains and more on Wednesday. By the end of the session, the prompt month fell more than 10%, losing $0.636 to settle at $5.675. Market participants note that the U.S. benchmark for natural gas has seemingly been responding to European and Asian market price trends more than its domestic fundamentals of supply and demand. We expect volatile price action to continue until weather-driven demand becomes a more prominent factor in the S&D balance. Looking ahead to tomorrow’s EIA storage report, we may see a triple-digit injection number that could put further pressure on domestic prices in the short term. Be sure to tune in tomorrow afternoon for the results. -EG
October 5th, 2021 – Natural Gas Market Update | Good afternoon everyone! NYMEX natural gas futures surged nearly 10% higher during Tuesday’s trading session despite continued forecasts for below-average demand for this time of year. By the end of the session, the November prompt month contract Concerns surrounding the global energy crisis in Europe and Asia and the accompanying rally in prices have spilled over into the North American market due to the linkage of exported liquefied natural gas to these overseas markets. In the past, prices at these exorbitant levels would incentivize producers to bring additional supply into the market to meet demand; however, due to under-investment in the sector, shrinking capital expenditure budgets, and a focus on paying down debts instead of prioritizing growth, we are now dealing with a supply crunch in which demand growth has outpaced supply. Prices may continue to climb higher until they reach a point of demand destruction, wherein commercial entities and other consumers reduce their consumption due to cost. -EG
October 4th, 2021 – Natural Gas Market Update | Good afternoon and welcome back to RiteRate’s market update for Monday October 4th, 2021. Natural gas bulls pushed the price of the November futures contract as high as $6.064 during today’s trading session. The prompt month contract traded in a $0.44 range before ultimately settling at a price of $5.766, up $0.147 or +2.6% from Friday’s closing price. Despite near-term supply and demand balances trending looser with lackluster weather forecasts pointing towards lower demand outlooks, market participants have been focusing on the price supportive factors of the longer-term: namely stout LNG export demand and expanded export capacity over the next 12 months. Additionally, record-setting overseas price action in European and Asian markets continues to influence market movement and sentiment of the NYMEX, the benchmark for North American natural gas.
Comparative price action between North America (Henry Hub), Europe (TTF), and Asia (JKM). With just one month left before the storage injection season comes to an end (and net injections into storage transition to net withdrawals from storage), prices are at an inflection point. Will prices march higher alongside those of Europe and Asia to account for the developing energy supply crunch in those markets, or will prices succumb to low-demand forecasts as we proceed into late October and November. Either way, we expect heightened volatility and dramatic market movements to remain thematic. -EG
October 1st, 2021 – Natural Gas Market Update | Good afternoon and happy Friday everyone! Natural gas futures prices came under pressure during today’s trading session as the prompt month futures contract dropped by $0.248 US/MMBtu to settle at $5.619. Weather forecasters note that the 15 day forecast continues to favor a warmer than normal temperature outlook that will suppress early season heating demand. These factors point towards looser balances and larger storage builds to close out the natural gas injection season. That being said, however, we note that NYMEX futures prices have been taking cues from overseas markets, mirroring their price action and rallying substantially whenever upwards price pressure manifests. -EG
September 30th, 2021 – Natural Gas Market Update | Volatility continues to run high in the natural gas market today as the prompt month November NYMEX contract undid yesterday’s fall to settle US$0.39/MMBtu higher at US$5.867/MMBtu. The day started off looking rather bearish, with prices falling to a low of US$5.341/MMBtu, before the release of the EIA Storage Report. As mentioned yesterday, estimates centered around the mid-80s, and an injection around the high-80s should have come across as a bearish indicator for lower prices. Instead, the10:30AM EST report showed an injection of 88 Bcf, which caused the declining prices to change course and begin their steady climb for the day. While weather has been revised to show slightly warmer adjustments, demand projections within the next two weeks have also shifted upward, indicating the potential for further strain on the supply and demand balance. Additionally, Dutch TTF and Asia JKM prices settled US$2.548/MMBtu and US$0.655/MMBtu higher yesterday, truly highlighting the natural gas crunch worldwide. At the time of writing, the prompt month contract currently trades at US$5.849/MMBtu, slightly above the October contract settle of US$5.841/MMBtu. ~CL
September 29th, 2021 – Natural Gas Market Update | Following a parabolic move upwards into contract expiration, natural gas futures retraced most of their recent gains. The November prompt month contract came under significant pressure, falling $0.403 (6.9%) to settle at $5.477 US/MMBtu. With the weather forecast looking unimpressive for natural gas demand heading into the month of October, expectations are that we will see larger than previously expected storage injections in the weeks to come, easing concerns regarding end of season storage inventory levels. Tomorrow, market participants will be watching for the results of the EIA’s weekly storage report that will be released at 10:30AM EST. According to a survey from the Wall Street Journal, analysts expect a build of 84 Bcf. We see a high-side risk for an injection in the upper 80s to low 90s which may cause the November contract to move to the $5.30 level. -EG
September 28th, 2021 – Natural Gas Market Update | Fasten your seatbelts folks! It looks like we’re in for a wild ride this winter. In one of the most volatile contract expiration days in recent history, the October contract traded in a remarkably wide range as high as $6.280 and as low as $5.602. Today marks the expiration of the October 2021 natural gas futures contract which gained $0.135 over yesterday’s settlement to close the day out at $5.841. Of note, the upcoming winter strip between Nov21 to March22 gained about $0.13 while all contracts beyond March 2022 settled in the red. The natural gas benchmark for North America seems to be mirroring the price action of overseas markets in Europe and Asia which rallied hard today. Concerns abound that there will not be adequate storage supplies to meet demand if there is a sustained period of much colder than normal temperatures. Storage inventories are building at a slow pace than the 5-year average, pointing to end of season inventory numbers that lag behind last year’s. There are still several weeks left before we enter the start of the winter heating season, and all market participants will have their eyes on the EIA’s weekly storage report on Thursdays. Now that the noise of options and futures contract expiration is behind us, will the market stabilize or perhaps sell off at these price levels, or will prices keep marching upwards like their overseas counterparts? Be sure to tune in here tomorrow for the latest coverage on this developing story. -EG
September 27th, 2021 – Natural Gas Market Update |Good afternoon and welcome back to RiteRate’s market update to start out the week. Despite warmer than normal temperatures in the 8-14 day forecast that would typically put bearish pressure on natural gas prices, the upcoming winter strip rallied over 10% higher today. The October contract gained $0.556 to settle at $5.706 US/MMBtu. Catalysts for the move higher included higher prices for natural gas overseas with European markets reaching new records highs. Additionally, today marks the expiration for options contracts for October 2021, and tomorrow marks futures contract expiration. Heightened price volatility is expected with market participants squaring out their positions before the October contract rolls off the board. Analysts note that with October weather looking unsupportive for natural gas demand, prices may come back under pressure once the noise of contract expiration has passed. -EG
September 23rd, 2021 – Natural Gas Market Update | The furnace kicked in last night and the sweaters are coming out of storage. The weather is starting to reflect the autumn season with the fall harvest moon glowing at night. Natural gas markets continue to remain strong as we approach the winter weather with less supply than normal and increased demand year over year. The industry has seen a slow migration away from coal to renewable energy, which is good for the climate. Although when the wind is still and the sun does not shine, natural gas power generation becomes the back up. Over the past five years the industry has seen a slow steady increased demand for natural gas power generation while producers are decreasing capital spending. The two are not good signs for a market that continues to remain 11% short of gas supply on an average day. Prices remain bullish until the market can become balanced. Enjoy the weekend. (RS)
September 22nd, 2021 – Natural Gas Market Update | Welcome back to RiteRate’s mid-week natural gas market update. Today’s price action was a snoozer compared to some of the volatility we’ve witnessed in the last two weeks. Not a single contract settled in the red today, but gains were limited to $0.02 or less. The front month October 2021 futures contract settled unchanged compared to Tuesday’s settlement at a price of $4.805, and traded between a range of $4.74 and $4.90 throughout the course of the day. Weather demand appears to be somewhat neutral, absent of any significant heating or cooling demand as temperatures stay within comfortable ranges. Market participants may be waiting to see the results of tomorrow’s EIA storage report that will offer a glimpse into the supply and demand balance for the previous week before putting on their next trade. According to a survey conducted by Reuters, expectations are for an injection of 75 Bcf for the week ending September 17th, 2021. -EG
September 21st, 2021 – Natural Gas Market Update | Hello and welcome back to another market update from Canadian RiteRate Energy. Natural gas futures for the upcoming winter strip (November 2021 – March 2022) came under significant pressure for the fourth consecutive day during Tuesday’s trading session. The selling and profit-taking on long positions stems from a pattern shift in weather forecasts pointing toward lower demand in their 15-day outlooks. By the end of the session, the October 2021 contract lost $0.18 to close at $4.805. Current temperatures are within seasonally normal bounds wherein it is not hot enough to increase electricity and air conditioning demand, and not cold enough for space-heating demand. This demand-neutral period occurs in the spring and fall of each year and is known in the industry as the “shoulder season”. In the near-term, we may see additional selling pressure that could potentially bring the prompt month down to the $4.50 to $4.60 level before we get into the start of the heating season in late October. -EG
September 20th, 2021 – Natural Gas Market Update | Good afternoon folks! Welcome back to RiteRate’s market update for Monday, September 20th. Taking a look at natural gas price action, futures contract came under pressure today despite making an intraday run up to $5.172. The October 2021 prompt month contract ultimately lost $0.120 to settle at $4.985, down 2.4% from Friday’s closing price. After being in overbought territory for much of the last two weeks, the market’s rally is now showing signs of exhaustion and retracement. Fundamental changes over the weekend pointed toward a looser supply and demand balance. Weather forecasts for the next 15 days continue to look unimpressive for natural gas demand as temperatures stay within seasonally normal ranges. The BSEE has reported than more than 73% of the natural gas production out of the Gulf of Mexico has been restored, easing storage concerns for the EIA’s South Central region. While European and Asian LNG markets surged higher today, the bullish price action was not enough to overcome weakening fundamentals in North America. Is this the start of another leg lower for the natural gas market, or are futures prices pausing here before resuming their upward march? The shoulder season of low demand in September and October is upon us, but there are only a few weeks left before substantial heating demand comes into play. Be sure to tune in here for the latest coverage and commentary from the RiteRate team as the situation develops. -EG
September 17th, 2021 – Natural Gas Market Update | Hello everyone and welcome back to RiteRate’s market update to close out the week. After settling at $5.335 yesterday, the October natural gas futures contract made an overnight high at $5.394 before encountering selling pressure for the remainder of the day. The contract settled down $0.230 US/MMBtu (-4.3%) at $5.105. We note that from a technical perspective, the parabolic price surge that had developed over the last two weeks was ultimately susceptible to retracement back downwards. Contributing to the negative price action today were changes to the 15 day weather pattern. We have observed that weather models have lost natural gas demand in their forecasts for the last 3 days as temperatures have changed from warmer-than-normal to more seasonally comfortable temperatures that do not require electricity for air conditioning (which is primarily generated from natural gas) or heating from natural gas. Turning our attention to the Gulf coast, the Bureau of Safety and Environmental Enforcement (BSEE) reported that 65% of natural gas production has been restored in the Gulf of Mexico. Recall that the loss of 2.0 Bcf/day of production out of the Gulf Coast has been offline in the wake of Hurricane Ida. Additionally affecting the supply and demand balance in this region was the continued outage of Freeport LNG, a facility that has been encountering power outages due to Hurricane Nicholas. With just six weeks to go until the heating season typically starts, market participants will be keeping a close eye on weather forecasts, tropical storm activity, changes to natural gas production, and overseas natural gas markets. Be sure to tune in here Monday through Friday for the latest coverage and commentary from the team at RiteRate. -EG
September 16th, 2021 – Natural Gas Market Update | It will be tough not to use another roller coaster analogy for today’s price action, but it sure was a wild ride in natural gas markets. In the early hours of the morning when most of North America was fast asleep, futures prices for the Title Transfer Facility (TTF) in the Netherlands, the benchmark for natural gas prices in Europe – entered a steep nosedive. By the end of the trading session, the front month contract had fallen over 11%. The negative pressure on European prices carried over into the American trading session with the October futures contract hitting a low of $5.228 around 8AM EST. Soon after this intraday low was hit, reports that two natural gas processing plants on the Columbia Gas Transmission system were encountering a supply issue that would potentially disrupt 2.2 Bcf of supply on the TCO system were enough to spook the market into a buying frenzy. Within a span on 30 minutes, the prompt month futures contract rallied up $0.40 to a peak of $5.60 and then began retracing back down to $5.30 as we drew near to the release of the EIA’s storage inventory report at 10:30AM. Surveys by Reuters and the Wall Street Journal reported that market participants expected a build in the 74 to 76 Bcf range for today’s number. The EIA reported an injection of 83 Bcf for the week ending September 10th, 2021, slightly bearish to expectations. This was enough to discourage market bulls from pushing prices back towards the highs of the day, and the October contract traded between $5.28 and $5.38 for the rest of the session before closing out the day at $5.335. -EG
September 15th, 2021 – Natural Gas Market Update | Hello and welcome back to another market update from the team at RiteRate. No shortage of volatility in today’s market! Natural gas prices whipsawed up and down in an exceptionally-wide range during Wednesday’s trading session. Starting at 4:30AM EST, natural gas prices vaulted $0.20 within an hour, spurred on by soaring overseas natural gas prices in Europe (TTF) and Asia (JKM). In the later part of the morning, futures contracts surged another $0.25 reaching an intraday high of $5.65 US/MMBtu. As if the price action wasn’t dramatic enough, the contract dropped $0.35 at noon and then rebounded into the close for a settlement of $5.46, a $0.20 gain over Wednesday’s close. Perhaps today’s market noise and lack of a clear direction is indicative of the mix of bearish and bullish factors present in the market. Overnight weather forecasts showed a loss of projected demand compared to previous days’ model runs. News that Freeport LNG remained offline after Hurricane Nicholas knocked out power at the facility continued to weigh on LNG export demand. Additionally, we are hearing that 60% of the Gulf of Mexico’s 2 Bcf/day of natural gas production has been restored. While these factors have put downward pressure on prices, the underlying storage deficit in the U.S. and abroad continues to fuel concerns of inadequate supplies for the coming winter. Prices in Europe and Asia have rallied tremendously this year and set all-time records for the 13th consecutive trading day. Even at $25.00/MMBtu, hungry buyers are competing for any natural gas they can get in these gas-starved overseas markets. -EG
September 14th, 2021 – Natural Gas Market Update | Good afternoon everyone! Taking a look at the natural gas market, the October futures contract traded in a $0.20 range on Tuesday before settling up just $0.029 over Monday’s settlement. The contract traded as high as $5.369 intraday but closed at $5.26 as bearish developments weighed on prices. Prices for natural gas have strengthened significantly since late August when about 2 Bcf/day of production out of the Gulf of Mexico was shut-in due to Hurricane Ida. This supply disruption exacerbated an already tight supply and demand balance in a market that fears it will have inadequate storage inventories for a cold winter. Since the passing of Ida, however, about 50% of the GoM output has since been restored, relieving some of the bullish pressure driving prices upwards. Market participants have also been watching Hurricane Nicholas, which has made landfall in Texas and Louisiana. We have heard reports that some LNG export facilities have had their operations disrupted, reducing the amount of gas that can be exported in the near-term. -EG
September 13th, 2021 – Natural Gas Market Update | Hello and welcome back to another natural gas market update from the team at Canadian RiteRate Energy. Futures contracts for natural gas resumed their climb upwards during Monday’s trading session, ultimately reaching a fresh seven-year high. The October 2021 contract touched a low of $4.91 in the early morning hours before vaulting higher up to $5.28 at the intraday peak. The contract ultimately settled at $5.231 for the day, gaining a total of $0.293 over Friday’s close and cementing the $5 region as an area of support. Weather model forecasts over the weekend have projected more natural gas demand in their two week outlook as warmer than normal temperatures increase the need for natural gas electricity generation. Additionally, market participants note that global prices for liquified natural gas (LNG) have been rallying to lofty levels several times more expensive than in North America. This pricing dynamic has kept U.S. LNG exports in demand as the cost to buy gas in the U.S. and ship it to European and Asian markets remains quite profitable. Another fundamental factor driving price action this week is the supply and demand situation in the Gulf of Mexico, where natural gas production has yet to be fully restored after Hurricane Ida first forced personnel to evacuate from platforms and then knocked out power for gas processing facilities. The situation there will be closely monitored as market participants evaluate quickly production will return to normal levels. Be sure to check out our market every afternoon for the latest news and commentary on this developing story. -EG
September 10th, 2021 – Natural Gas Market Update | Good afternoon and happy Friday everyone! Today marked a rather uneventful end to an action-packed trading week. After reaching a high of US$5.058/MMBtu, the October prompt month NYMEX contract settled nine cents lower than yesterday, and continues to trade slightly above US$4.95/MMBtu. The downward pressure extends outwards through the entirety of the winter strip (November to March), with November down the most from yesterday settling at US$4.973/MMBtu. As per usual, traders tend to sit tight at the end of the week going into weekends, so no strong conclusions on price action next week can really be drawn. Fundamentals wise, early morning reports did see a slight recovery in Gulf of Mexico production, and demand projections continue to trend downward towards the end of the month. Weather models are now confirming a cooler end to September as seen in runs over the past two days. A lot of concern still sits on the storage deficit, but injections are expected for data to be released next week reflecting the nominations for this week. Early estimates are citing +75 Bcf, 23 Bcf greater than the 52 Bcf reported yesterday. ~CL
September 9th, 2021 – Natural Gas Market Update | Good afternoon everyone. In Thursday morning’s trading session, natural gas futures traded sideways to lower in anticipation of the EIA’s weekly storage inventory report release at 10:30AM. Expectations pointed to a build in the high 30s to low 40s, but the number came in much higher with an injection of 52 Bcf. While a larger than expected injection indicates that the supply and demand balance for the previous week was looser than expected, the market responded bullishly, driving the price from $4.86 to $5.04. By the close of the session, the October 2021 futures contract for natural gas gained $0.117 over the previous day to settle at $5.031. Given the concerning storage deficit and lack of production response this year, it makes sense that the market is ready to jump on even the slightest bullish factor. Recent price spikes highlight the potential for more substantial rallies this winter if we see sustained colder than normal temperatures through December, January, and February. -EG
September 8th, 2021 – Natural Gas Market Update | Good afternoon folks and welcome back to another market update from the RiteRate team. In our market update from Tuesday afternoon, we highlighted that any price pullback in the natural gas market will likely be short-lived due to the current storage inventory deficit and the underlying tight supply and demand balance. In Wednesday’s trading session, the prompt month futures contracts for natural gas surged +7.6% before settling at $4.914, a stout $0.346 gain over Tuesday’s settlement. This rally decisively broke through previous resistance level at $4.70, touching as high as $5.01 intra-day. At this point, market participants wonder whether there is still upside potential at these lofty levels or if a pullback to support levels is more likely. Taking a look at the fundamentals, weather model forecasts for the 2nd half of September have turned warmer, indicating that the call on natural gas for electricity generation will be higher. Additionally, natural gas processing plants in Louisiana have yet to resume operations due to ongoing power outages in the wake of Hurricane Ida. Roughly 80% of natural gas production out of that region remains offline, which has continued to tighten the supply and demand balance. Looking ahead to Thursday, the EIA will release its weekly storage report at 10:30AM. According to a survey from Reuters, expectations are for a build of 40 billion cubic feet of natural gas for the week ending September 3rd. Depending on the report’s number, we may see a run above $5.00 or a pullback to the $4.70 region. Be sure to check out our update tomorrow afternoon for the results. -EG
September 7th, 2021 – Natural Gas Market Update | Good afternoon! We hope all our readers had an excellent long weekend. Over the last two weeks, natural gas futures surged to a multi-year high due to a combination of bullish factors relating to higher demand weather forecasts and the EIA’s storage report. During Tuesday’s trading session, however, natural gas futures bucked the short-term trend and broke out of the upwards channel that had been in place since August 25th, 2021. From the settlement of $4.172 on Friday, the October futures contract lost $0.144 US/MMBtu to settle at $4.568. Recovering natural gas output out of the Gulf of Mexico contributed towards driving today’s price action lower, but we note that technically overbought conditions resulted in selling and profit taking among market participants. Will this price weakness last? While we are heading into a period of lower demand in September, we note that the underlying fundamentals of the market – namely the storage deficit to the 5-year average, the higher year-over-year LNG exports, and lack of production growth – will continue to provide support to prices if any near-term bearishness becomes apparent. As such, it would seem that any periodic pullback in price will be short-lived as we head into the winter season. If you have any questions about how RiteRate can help you manage your energy budget with one of our natural gas plans, be sure to give us a call at (416)-862-0322.
September 3rd, 2021 – Natural Gas Market Update | Good afternoon everyone! Taking a look at the natural gas market, the October futures contract for gained $0.071 US/MMBtu to settle at $4.712 at the end of Friday’s trading session. The contract traded as low as $4.586 in the early hours of the morning and as high as $4.718. The close at the upper end of the range for the week indicates that the upward price momentum has not run out of steam. While the charts for natural gas look overextended and ripe for a pullback from a technical perspective, the prompt month contract has the potential to reach up to $5.00 US/MMBtu in the coming weeks if we continue to see favorable weather conditions for demand and smaller than average storage injections for the remaining EIA storage reports. Enjoy your long weekend and be sure to check back in with us when we return on Tuesday afternoon with another market update from the team at Canadian RiteRate Energy. -EG
September 2nd, 2021 – Natural Gas Market Update | Good afternoon folks. Taking a look at natural gas price action for Thursday, the prompt month futures contract for October 2021 reached as high as $4.727 following the release of the Energy Information Administration’s weekly storage report. The U.S. agency reported a net injection of +20 Bcf across storage facilities in the United States, slightly under market participants’ expectations for a build of 25 Bcf. Given the supportive backdrop for the natural gas market, the confirmation of another storage build that lags behind the 5-year average provided enough ammunition for market bulls to push prices up by $0.08 US/MMBtu in the minutes following. Concerns remain that the market will have inadequate storage supplies if colder than normal temperatures hit early in the winter’s heating season or if particularly harsh temperatures manifest through the months of January and February. The other prominent factor influencing natural gas prices is the state of natural gas production out of the Gulf of Mexico, where production remains shut-in in the wake of Hurricane Ida. It is unclear how quickly this production will be restored as efforts to restore power to natural gas processing plants continue. -EG
September 1st, 2021 – Natural Gas Market Update | Good afternoon everyone and welcome back to our first market update for the month of September. Prices for natural gas futures traded in moderately positive territory overnight, but exploded upwards in a stunning fashion starting around 9:00AM EST. From the mid $4.40s, the price of the October futures contract surged to a high of $4.706 before retreating into the close to settle at $4.615 US/MMbtu, a whopping +$0.238 or +5.40% higher than Tuesday’s settlement. On the supply side of the equation, natural gas production out of the Gulf of Mexico remains largely shut-in. The Bureau of Safety and Environmental Enforcement released a report indicating that ~95% of natural gas production is offline, in part due to power issues at processing facilities onshore. Efforts to restore power to communities in southern Louisiana are ongoing and will likely continue into mid-September. Tomorrow market participants await the results of the Energy Information Administration’s storage inventory report release at 10:30AM EST. Surveys from both Reuters and the Wall Street Journal expect a storage injection of +25 billion cubic feet, which would bring the total storage inventory up to 2,876 Bcf. Concerns surrounding inadequate storage levels for the upcoming winter continue to be one of the most supportive factors in the market. Be sure to tune in to our market update for the results and more natural gas market commentary from the RiteRate team. -EG
August 31st, 2021 – Natural Gas Market Update | Good afternoon everyone. In another trading session characterized by a wide range, natural gas futures traded as low as $4.215 early Tuesday morning before vaulting higher to close up $0.072 over Monday’s settlement and end the day at $4.377. Production levels out of the Gulf of Mexico continue to be compromised due to shut-ins from Hurricane Ida, putting upward pressure on prices. At the same time, demand levels have been depressed due to cooler than normal temperatures and demand-destruction from power outages throughout southern portions of Louisiana. As we proceed into the month of September, natural gas traders look to evaluate the conflicting effects of bullish and bearish fundamental factors. Demand for natural gas electricity generation continues to wane with the peak of summer heat behind us, but at the same time, injections of natural gas into storage continue to fall short of the 5-year average, which indicates that we may see a potential supply crunch this winter if colder than normal conditions manifest through December, January, and February. -EG
August 30th, 2021 – Natural Gas Market Update | Welcome back to another week folks. We hope everyone’s Monday has been off to a great start. Taking a look at the charts, futures prices for natural gas contracts continued to move higher after Sunday’s market open, reaching as high as $4.52 during overnight trading. Prices quickly reached short-term overbought conditions from a technical perspective, triggering a sharp retracement down to as low as $4.22. By the end of the trading session, prices settled $0.20 off the highs of the day at $4.305, just $0.083 down from Friday’s settlement. Last week’s rally was fueled by a combination of bullish events and factors. Starting with the low-side surprise of a smaller than expected storage build on Thursday, prices were further supported by hurricane-driven disruptions to natural gas production out of the Gulf of Mexico. When weather model guidance began to suggest that Hurricane Ida would track east of key LNG exporting facilities, concerns that lasting damage to export facilities were alleviated. This was enough to tip the balance in favor of the bulls and send prices to new heights. From these technically overbought levels, it won’t take much bearish news in the way of lower demand weather forecasts to see prices retreat back down to the $4.00 level, but with the winter season coming up, it doesn’t appear likely that prices will move much lower than this area of support should a selloff emerge. -EG
August 27th, 2021 – Natural Gas Market Update | Happy Friday folks! In a stunning show of strength to end the week, prices for natural gas futures surged to new highs on Thursday and Friday. The September contract gained $0.186 US/MMBtu to expire at $4.370 at the end of today’s trading session, an increase of 4.4% over yesterday’s settlement price. As tropical storm Ida gains strength in the Gulf of Mexico, we are starting to see production shut-ins of more than 1.0 bcf/day, reducing the supply available for consumption and tightening the supply and demand balance. Weather guidance suggests that the storm will make landfall early Sunday morning at hurricane strength, however, the path of the storm seems to be tracking east of most LNG export facilities, somewhat alleviating concerns that we could see LNG export demand disrupted. Today’s price action stands in stark contrast with seasonal trends, but as we all know, the past year for the oil and gas market has been unprecedented in many ways. Be sure to tune in to our market update on Monday for more coverage of this developing story. -EG
August 26th, 2021 – Natural Gas Market Update | Good afternoon folks. Natural gas prices surged during Thursday’s trading session after the EIA’s storage report came in much lower than expectations. Surveys conducted by the Wall Street Journal and Reuters indicated that the market was expecting a storage injection in the high 30s or low 40s, but the reported 29 bcf injection caught most market participants by surprise. The small number reflects that the supply and demand balance had been tight for the previous week, and with current storage inventories below the 5-year average, it provided the bullish catalyst to send prices well north of $4.00 US/MMbtu. With the September futures contract expiring tomorrow, we may see additional volatility in tomorrow’s price action. Natural gas traders also look towards the tropics where a major hurricane is expected to make landfall near the border of Louisiana and Texas early next week. The storm could shut-in as much as 2.0 bcf/day of natural gas production out of the Gulf of Mexico, but it also has the potential to disrupt natural gas exports by up to 8.0 bcf/day. The effect of the hurricane overall would put bearish, downward pressure on prices as the storm knocks out power and reduces the demand for electricity and cooling, a phenomenon observed several times during last year’s hurricane season. Be sure to tune in to our update tomorrow for the latest on this developing story. -EG
August 25th, 2021 – Natural Gas Market Update | Good afternoon and welcome back to RiteRate’s market update for Wednesday, August 25th, 2021. Prices for the soon-to-expire September natural gas futures contract traded in a wide range during today’s trading session. The contract’s price peaked mid-day at a high of $3.991 before selling off into the close to settle at $3.987, just $0.001 US/MMbtu higher than Tuesday’s close. Although futures prices are currently underpinned by hot temperatures across the country for the remainder of this week, traders look towards weakness in cooling demand in the 10-15 day time frame. The demand for natural gas electricity generation will reach a climax during this period and then settle down towards more seasonally normal levels. Taking a look at price action from a technical perspective, we see strong resistance above the $4.00 US/MMBtu level and support in the $3.85 region. With the settlement for September options contracts expiring tomorrow and September futures contracts expiring Friday, we expect to see the volatility continue into the end of the week. Adding to that volatility will be tomorrow’s 10AM EST storage inventory report from the Energy Information Administration who is expected to announce an injection of 40 billion cubic feet according to a survey conducted by Reuters. Don’t miss out on tomorrow’s update for the results and the latest commentary on the natural gas market from the RiteRate team. -EG
August 24th, 2021 – Natural Gas Market Update | Good afternoon everyone. Futures prices for natural gas contracts sold off moderately during Tuesday’s trading session. Most of the losses occurred in the contracts that make up the balance of the summer (September and October 2021) and the winter strip (November 2021 to March 2022), however, contracts in the 2023 to 2025 time frame appreciated slightly. At the end of the session, the prompt month September contract settled down $0.049 US/MMBtu to end the day at $3.896. The market has been paying very close attention to the seasonal loosening of the supply and demand balance as we move past the peak of cooling demand at the end of August and continue into the comfortable temperatures of the fall. It remains to be seen how the first few weeks of September will play out weather-wise. Continued forecasts for hotter than normal temperatures into mid-September would give market bulls the buying strength to push the prompt month north of the $4.00 US/MMBtu level once again, whereas cooling demand-destroying tropical storms or hurricanes could send the market back down to a relative low before any rally into the winter starts. Either way, we can expect that volatility will continue to remain elevated in the interim. For the latest on news and events that affect the natural gas market, be sure to tune into our update here every afternoon to learn more about what is driving daily price movements. If you have any questions or would like to speak with a member of our team, feel free to give us a call at 416-862-0322. Thank you all and have a great evening! -EG
August 23rd, 2021 – Natural Gas Market Update | Good afternoon folks! Prices for natural gas futures made a strong showing during Monday’s trading session. Supporting the markets this week are weather forecasts calling for additional heat in the near-term, although offsetting the demand gain somewhat were production levels increasing over the weekend, rising above the rolling 30-day average. At the conclusion of the day, the September contract rose $0.094 US/MMBtu to settle at $3.945. From a technical perspective, the market’s observed trading range sits between $4.20 and $3.75. Today’s close in the mid $3.90s points towards a potential break of the short-term downtrend that has been in place from August 5th onward. If a price rally is to test the $4.00 area of resistance, we may see an upward breakout sustained by hotter than normal conditions throughout North America, however, we may see a move below $3.80 if weather models suggest any cooler trend in their 15-day forecasts. For more coverage of the natural gas market, be sure to tune in to our updates every afternoon Monday through Friday. You are also welcome to call us at 416-862-0322 with any questions you may have. We’re always happy to help. -EG
August 20th, 2021 – Natural Gas Market Update | Happy Friday everyone, and welcome back to another market update from the team at RiteRate. Today’s price action featured a momentum reversal quite similar to Thursday’s, but in an opposite direction. The weather forecasts that called for hotter temperatures in the 15 day forecast were reinforced by overnight forecasts calling for ever stronger cooling demand, driving prices up from yesterday’s settle at $3.830 to the high of the day at $3.951 US/MMBtu. After topping out at this level, prices steadily sold off into the close to settle at $3.851, up $0.021 from yesterday. We are at a time of the year when cooling demand typically peaks and begins to subside going into the shoulder season of September and October, but with the supply and demand balance tighter than in previous years, any bullish catalyst is likely to spark a rally in prices. Traders and analysts see the potential for this winter’s withdrawal season to create significant upside to prices, but we will have to navigate through the bearish hurricanes that may develop in the tropics over the next two months first. Be sure to tune into our market update on Monday for the latest developments in the natural gas market. Until then, stay cool and enjoy your weekend folks! -EG
August 19th, 2021 – Natural Gas Market Update | In anticipation of a larger than normal storage build, natural gas futures prices traded lower overnight into Thursday’s morning session. At 10:30AM EST, the U.S. Energy Information Administration reported an injection of 42 billion cubic feet of natural gas for the week ending August 13th, sending prices down to $3.73 US/MMBtu, $0.12 lower than yesterday’s settlement. By noon, however, momentum quickly shifted in the other direction as mid-day weather models called for hotter temperatures than previously forecasted. By the end of the session, the September contract settled just $0.022 lower at $3.830 US/MMBtu. Also trading lower were futures for crude oil which settled down $1.77/barrel to $63.69, a level not seen since the end of May 2021. With uncertainty surrounding the Delta variant, the extent to which vaccines will be effective in combating its spread, and potential future lockdowns, it remains to be seen how the ongoing pandemic will play out into the fall and winter of this year, clouding the outlook for energy demand further. For the latest coverage in this developing story, be sure to tune into RiteRate’s natural gas market update tomorrow afternoon. -EG
August 18th, 2021 – Natural Gas Market Update | Natural gas futures traded within a narrow range before settling modestly higher during Wednesday’s trading session. The prompt month contract for September delivery reached a high of $3.875 before settling up $0.015 higher at $3.852. Today’s price action reflects the lack of a significant catalyst that would drive prices higher or lower, however, prices remain in a short-term downtrend as temperatures subside into the end of the month. Traders look towards tomorrow’s EIA storage report to provide clarity on last week’s net storage injection. Analysts have provided estimates in the range of 19 to 42 bcf, noting hot temperatures that increased cooling demand were offset by wind-powered electricity generation. A Reuters survey found the average estimation to be 31 bcf while the Wall Street Journal survey reported an average estimation of 31 bcf. The underlying storage dynamic remains bullish as the current storage inventory sits at a 6% deficit to the 5-year average. For the results of the storage report as well as more daily coverage on what’s driving the market, be sure to tune into RiteRate’s natural gas market update tomorrow afternoon. -EG
August 17th, 2021 – Natural Gas Market Update | After rallying upwards to US$3.988/MMBtu yesterday, the September NYMEX contract resumed a downward trend overnight. We saw a slight blip upwards in prices at 8:30AM EST as traders started their days, pushing towards the daily high of US$3.954/MMBtu. Markets continued to trend down shortly, rounding out today’s session at US$3.837/MMBtu. As we look to exit summer and enter the shoulder transition months, volatility is widespread, as seen with the ten cent swings up and down day-over-day. While production continues to sit low, decreasing demand and a forecasted cool end to August has relieved some of the previous pressures on natural gas prices. ~CL
August 16th, 2021 – Natural Gas Market Update | After spending much of last week in negative territory, futures prices for natural gas made an abrupt change in momentum during Monday’s trading session. Prices for the prompt month added on $0.085 to close at $3.946 US/MMBtu by the end of the session. Although weather forecasts for cooling demand looked weaker towards the end of August, falling domestic production levels and concerns of shut-ins to natural gas production out of the Gulf of Mexico were enough to drive prices higher. Prices topped out at $3.988 before settling lower, indicating that the $4.00 area is still very much in play for natural gas bulls. Will prices continue to accelerate from this level or will weakening demand typical of late August and early September overcome efforts to push prices further upwards? Be sure to tune in to our update tomorrow afternoon for more coverage of the natural gas market. -EG
August 13th, 2021 – Natural Gas Market Update | Following through on the downward trend that has been established during the week, natural gas futures prices continued to descend lower after Thursday’s weaker than expected EIA storage report. By the end of the trading session, the prompt month contract for September 2021 broke through historical support levels at $3.90 and lost $0.072/MMBtu to settle at $3.861. Contributing to the selling pressure was the forecast for rains blanketing the southeastern United States in the wake of Tropical Storm Fred. With the hurricane season approaching, we expect more bearish developments over the next two months relating to lower cooling demand and the disruption to LNG export demand. Be sure to tune in to our updates next week for more coverage of the natural gas market from the RiteRate team. -EG
August 12th, 2021 – Natural Gas Market Update | Natural gas futures prices came under pressure during Thursday’s trading session. This comes after 5 consecutive trading days in which the price has settled lower, creating a noticeable short-term downward channel after several months of bullish price action. With forecasts for summer heat fading into the end of the month, demand for cooling has trended lower, testing the ability of the NYMEX to hold onto its gains in recent months. To the downside, we see support levels at $3.90 and at $3.70. Aiding the bears’ efforts to send prices lower was today’s storage inventory report release from the U.S. Energy Information Administration. The report was neutral to market expectations at +49 bcf but did not provide enough ammunition for market bulls to buy into. Following the report’s release, prices tumbled from $4.01 all the way down to a low of $3.90 before settling at $3.933 US/MMbtu. As we head into the second half of August, traders will be monitoring weather forecasts and tropical storm activity that could significantly impact the short-term supply and demand balance. Be sure to tune in to our update tomorrow for more information and day-to-day coverage of the natural gas market. -EG
August 11th, 2021 – Natural Gas Market Update | Prices for natural gas futures came under selling pressure during the morning of Wednesday’s trading session. The psychological floor of $4.00 US/MMBtu was broken after a sharp sell-off, but prices retraced most of the losses and settled just $0.03 lower to end the day at $4.059. National demand for natural gas consumption is projected to reach a seasonal peak this week and then taper off to more normal temperatures in the second half of August, easing bullish pressure from elevated spot prices across the country as cooling demand dissipates. Additionally, we are approaching the peak of hurricane season, with most storms occurring within the mid-August to mid-October time window. While hurricanes in the past have historically had a bullish effect on natural gas prices due to Gulf of Mexico production disruption, hurricanes within the last 5 years more often have a net bearish effect on prices due to LNG export disruption and reduced cooling demand throughout the Southern United States. Looking ahead to tomorrow’s EIA storage report, analysts expect an injection in the upper 40s to low 50s. Be sure to tune in tomorrow for the results and more natural gas commentary from the RiteRate team. -EG
August 10th, 2021 – Natural Gas Market Update | After reaching up to a high of $4.126, the price for natural gas ultimately moved up just $0.029 during Tuesday’s trading session to settle at $4.089. Buyers came in as the September futures contract price dropped down to $4.01, indicating that bullish sentiment tied to market expectations for a tight storage-withdrawal season is still strong. Taking a look at the most recent weather model forecasts however, it appears that the widespread heat the continental United States and Canada have been experiencing will likely fade back to more seasonally normal temperatures in the second half of the month. Keeping that in mind, the potential for a strong breakout above the $4.20 price level may not be realized unless weather models begin to show above normal temperatures that drive up the demand for natural gas electricity generation. -EG
August 9th, 2021 – Natural Gas Market Update | Natural gas futures kicked off the week on a bearish note during Monday’s trading session. The prompt month September contract fell $0.080 US/MMBtu to close at $4.060 after settling unchanged at $4.140 US/MMbtu on Friday. Although the underlying market sentiment remains bullish due to concerns of inadequate storage inventories going into this winter’s heating season, the sell-off today was fueled by changes in production and exports. Production levels are nearly 1.0 bcf/day off lows seen earlier this month and demand for LNG exports fell under 10.0 bcf/day over the weekend. These factors together loosened the balance of supply and demand and put a negative pressure on futures prices. On the other side of the equation however, hot temperatures across the United States and Canada are creating stronger than normal demand for natural gas electricity generation. The extent to which this element provides support to prices over the next few weeks will likely depend on the intensity and duration of the heat into the second half of August. -EG
August 5th, 2021 – Natural Gas Market Update | Aside from inching higher in the morning session, natural gas prices moved relatively sideways throughout the day. September futures quotes settled at $4.140 on Thursday, slightly lower than where we finished the previous trading day. As per every Thursday, the weekly EIA storage report was of big concern to traders. Early expectations were that U.S. utilities added an average of 21 Bcf (billion cubic feet) of gas into storage for the last week of July. Straying from the consensus, the report detailed a small build of 13 Bcf. Compared to a build of 32 Bcf for the same week a year ago and the 5-year average of 30 Bcf, one would expect some pressure from the bulls. Perhaps low storage reserves have already been priced into the market, or fundamentals aren’t quite enough to convince buyers. It is worth noting that the overnight weather outlook revealed temperatures returning back to monthly norms following next week’s heat wave. Although the 7 day forecasts are hot, temperatures are looking less impressive in the long-term. Nonetheless, today’s below average storage build is proof that the extra demand is making it harder to fill storage inventories for the winter heating season. -SM
August 4th, 2021 – Natural Gas Market Update | Natural gas markets have brought some significant movement to the chart after several days of consolidation. The September futures contract settled almost 3.5% higher locking in a settlement of $4.158. Building from yesterday’s gains, trading behaviour remains bullish after weather models introduced more heat into the forecast and production faced an unexpected decline. With summer heat approaching what is historically the peak period of the month, weather forecasts have once again become the driving force of gas markets. NatGasWeather noted that next week has added more than 5 cooling degree days with widespread heat expected to flood across most the United States following the weekend. Threats of heat are expected to significantly increase the amount of gas burned for power generation and continue to weigh on storage deficits. With maintenance events pulling production down another 1 billion cubic feet, we are yet to see a supply-side response. As we saw last week, the $4.20 level is still an area of great resistance. Afternoon prices closed just short of here, but the bullish momentum could continue to propel any pullbacks; many analysts are measuring the next move to $4.40.
August 3rd, 2021 – Natural Gas Market Update | Good afternoon folks, welcome to the first week of August! The September futures contract initially pulled back this morning before turning around to break the $4.00 level. Today’s gains followed through to a high of $4.051 before reaching a settlement of $4.027. The long weekend bounded prices within a tight trading range but a sustained move past today’s high will likely be a signal that traders are willing to buy strength again. Holding support for natural gas markets is the expectation for heat to return to next week’s forecasts. Although current temperatures are being dampened by a series of wet weather systems, next week is likely to bring back the heat with peak highs expecting to reach to the low to mid-90s across the US. While temperatures are looking to make a comeback, supply-side fundamentals are remaining weak. Production levels took a big hit overnight, falling below 91 billion cubic feet, and average storage injection rates are 13% lower than the 5-year average. Demand is simply outpacing supply, and next weeks expectations are enough to keep markets tight. Overall, the fundamentals are proving to be relentless for supply. Storage facilities are trying to refill their inventories to sound winter levels, but warmer temperatures have continued to stop them in their tracks. -SM
July 30th, 2021 – Natural Gas Market Update | Good morning folks and happy Friday! The latest TETCO news was enough to tip the balance in the favor of the bears on Friday with futures quotes down over 4%. Enbridge released an alert on Thursday evening detailing that their Texas Eastern Pipeline (TETCO), will be able to increase its flows on their 30” mainline starting August 4th. Adding 0.2-0.3 Bcf/d (billion cubic feet per day) of southbound flow through the station, outbound capacity will be much stronger. Just as TETCO comes back online next week, there are additional interruptions to watch for on the large Chicago-bound pipeline, NGPL. Extensive maintenance is planned between August 3rd-26th which is likely to hinder flows to a further 0.8 Bcf/d. Seasonality is also starting to pay its dues as temperatures and demand for cooling begin to fade. There is still potential for August temperatures to drive up cash prices as gas is used during peak heat swells, but markets could start to look downwards. With natural gas markets being bullish for some time now, today is certainly a change to sentiment. Traders will need to decide if strong exports and flat production are bullish enough to make this a buying opportunity for the prompt month. With the Civic Holiday on Monday, the RiteRate team would like to wish you a fantastic long weekend. See you on Tuesday! -SM
July 29th, 2021 – Natural Gas Market Update | September natural gas futures made an early push to $4.00 ahead of today’s weekly storage report. Expecting a build near the high 30s to low 40s, the EIA recorded an actual injection of 36 Bcf (billion cubic feet); almost 10 Bcf higher than both the 5-year and same year average. Despite the healthy injection, markets continued to tilt bullish with afternoon prices settling at $4.059. As we know, healthy injections don’t necessarily mean strong inventories; it is important to look at the big picture. The early summer heat has been biting into inventories as total stocks are currently 523 Bcf lower than they were to date last year. That being said, time is running short to build storage stockpiles. Following the September-October shoulder season, gas players will be forced to take withdrawals from inventories to keep up to the colder temperatures.n terms of other fundamentals, Thursday has brought little change in forecasts. Weather driven demand is expected to be lower next week and mid-August temperatures are leaning slightly above normal. Global exports are remaining strong, and we are yet to see a significant price-response from production to curve demand. -SM
July 28th, 2021 – Natural Gas Market Update | Happy Wednesday folks! Natural gas futures continued to fall into Tuesday’s after-hours before springing a comeback for today’s trading session. With today being the 28th, the August futures contract is due for expiration come the 2:30PM settlement. Expiration typically brings two-sided trading to the table with some natural gas players booking profits while others square out losing positions. With August closing out at $4.044, traders will now turn their focus to the September futures contract which is currently sitting below $4.00. The last time a summer contract ended up expiring above the $4 mark was seven years ago; we are certainly in unfamiliar territory. After yesterday’s close lower for the first time in 8 sessions, today’s comeback didn’t go unnoticed. Many analysts are calling expiration the culprit of intraday volatility while others are building a case for the fundamentals. Next week’s temperatures are looking much milder, yet robust LNG demand and tighter storage inventories can’t help but look bullish. Looking ahead to tomorrow’s EIA storage report, expectations are for a build of 40 billion cubic feet. Tomorrow will be a testament for the supply and demand balances as we approach the month of August. -SM
July 27th, 2021 – Natural Gas Market Update | Natural gas futures are trading 4% lower today as traders look to lock in profits before the August futures settlement. Tomorrow, the August contract will roll over, leaving September to take its place as the prompt month. As traders shift their focus, the next 24 hours will likely bring some volatility to natural gas markets. Overall, today’s price movement was 15 cents off the high, recording a settlement of $3.971. Also aiding in today’s fall were developments in weather models. Forecasts are looking less impressive, and analysts are expecting a drop in demand for air conditioning next week. One would expect that prices would gap higher after a hot weekend, but average gas demand is projected to drop from 95.4 Bcf D (billion cubic feet per day) this week to 92.8 Bcf D next week. When you look at the long-term chart for the August contract, we have spent majority of the last year bouncing between $2.40 at the bottom and $3.20 on the top. Considering this, there is still plenty of support underneath where we are today; especially above the $3.80 hurdle. -SM
July 26th, 2021 – Natural Gas Market Update | Good afternoon folks! Natural gas markets initially shot up this morning to a contract high of $4.187 but quickly showed signs of exhaustion. The resistance highlights some selling pressure at the $4.20 mark while prices are underpinned by support at $4.00 and $3.80. Although markets didn’t get away with the run they wanted, the current trend remains upward with another positive settlement of $4.102 from the August futures contract. The next measured move is pointing towards $4.40 but traders will have to get through the $4.20 level first. Monday weather reports highlighted near term weakness as early August temperatures are forecast to be well below normal. With cooling degree days down, its looking like traders are still hanging onto the promise of heat in the 11–15-day forecasts. As long as temperatures are still an issue out west and oversea quotes remain firm, it is likely that we will continue to see upward pressure on pullbacks.It is important to note that the prompt month futures contract hasn’t traded this high since the winter of 2018. Prices like these could be expected with cold temperatures, but few would have predicted price action like this in the summer. -SM
July 23rd, 2021 – Natural Gas Market Update | Today marks another day in the green for natural gas futures – Getting sick of hearing that yet? After almost a week of consecutive positive settlements, natural gas markets have continued to move forward. Making some room above the $4.00 level, the prompt month futures contract recorded a settlement of $4.06. Keeping supply and demand balances tight are relentless overseas prices and hot weather forecasts over the next 8-14 days. If you’re hoping for prices to come back down, you may just have to wait for a reversal from the weatherman.There is no doubt that $4.00 gas is attracting a lot of attention. Prices are high and traders haven’t experienced these altitudes since late November of 2018. Unless fundamentals weaken, be prepared to hold on tight; analysts are predicting a follow-through to $4.10! -SM
July 22nd, 2021 – Natural Gas Market Update | Natural gas futures just barely pulled off the $4.00 benchmark today with the August contract settlement coming in at $4.003. Breaking multi-months highs, the contract extended its reach to $4.006 before the after-hour trading session commenced. With the recent surge in cooling demand, today’s EIA storage report was one of the most anticipated of the season. Despite a strong storage build of 49 billion cubic feet, traders were able to look beyond the inventory balance and onto the rest of the fundamentals. Yesterday’s midday weather report tilted even hotter over the next two weeks, anticipating more cooling demand for the near future. Also of great concern are production levels coming out the US. Bullish traders are hoping that weather forecasts push hotter while production continues to remain flat, the perfect recipe for upside. It is important to keep in mind that storage levels remain a deficit to historic norms. Large increases like today are helpful, but they only make up a fraction of the volume needed for the winter. We’ll catch you back here tomorrow! -SM
July 21st, 2021 – Natural Gas Market Update | Good afternoon folks. Following yesterday’s hefty settlement, after hour prices continued to truck along well into the evening. The August futures contract made its way to a high of $3.965 before reluctantly settling out the day at $3.959. Also showing movement in energy markets was crude oil. With a $3.00 comeback today, WTI surged to $70.31, recovering a lot of Monday’s major retracement. Although supply is more certain now, many analysts believe that the recent selloff was overdone. As natural gas markets continue to show upside, the talk of the town is the prompt month hitting $4.00. The uptrend has futures contracts dialed in for this mark, but today’s resistance has prices falling just shy of here. The latest weather data is continuing to trend hotter, supply remains tight, and national exports are holding relatively strong. Many analysts think that $4.00 is bound to happen with this “seemingly unstoppable” rally. Tomorrow we will cover the weekly EIA storage report to get a better look at the current supply and demand balances. There is a chance that a disappointing build could turn prices around. However, last week showed us that traders are not afraid to shrug off a large storage build; especially if the rest of the fundamentals are pointing in the opposite direction. -SM
July 20th, 2021 – Natural Gas Market Update | Natural gas markets continued to press forward today with futures contracts showing further bullish momentum. Bringing another 3% of gains to the table, the August futures contract settled at $3.876. Today goes to show that markets have enough resilience to push past the $3.80 level, a huge area of price contention lately. So, what now? Will prices continue to plow forward after a settlement above here? At this point, the heat out west is proving to be relentless with hotter forecasts expanding into more central and southern areas of the United States. Production is running lighter than demand and solid global exports are not helping. Regardless, it is difficult to be a seller in this market. Futures contracts are breaking 30-month highs and markets are not shy to day-after-day gains. Just as more heat will generate upside, we may need a break in temperatures to reverse it. -SM
July 19th, 2021 – Natural Gas Market Update | Welcome back to another installment of RiteRate’s natural gas market updates. Markets have gapped higher to kick off the week with the August futures contract up 2.8%, settling at $3.779. Gains are supported by recent developments surrounding weather outlooks and OPEC regulations. In terms of fundamentals, stronger air conditioning demand is expected to come back into play with long term weather outlooks slightly heating up over the weekend. Stagnant production levels coupled with strong export demand are also supportive of prices. Trader’s will likely watch for further changes in weather models to fuel a breakout to the upside. In attempt to slightly reduce the risk of short-term oil-price jumps, OPEC (the Organization of the Petroleum Exporting Countries) and its allies have reached a deal to increase monthly crude supplies by 400,000 barrels a day. Although not directly related to nat gas, increased supply plans caused crude oil prices to plummet almost $5.50 today, or roughly 8%. With the Canadian Dollar being strongly correlated with crude, it has made a turn downwards while the US Dollar has strengthened. Higher conversion rates can be bullish for natural gas futures prices, especially those looking a couple years ahead. -SM
July 16th, 2021 – Natural Gas Market Update | Happy Friday folks, we finally made it to the end of the week! Today continued the battle between the bullish and bearish indicators. In the bullish corner are declining production levels coupled with tight storage banks relative to historical averages. Coming out of the bear camp are unimpressive weather forecasts to round out July. Without weather to generate upside momentum, it was originally looking difficult to build a case for a breakout. Although the bulls did not land a knockout punch, they seemed to come out on top. As the bout reflected, natural gas futures traded higher today, reversing almost all of yesterday’s losses. The $3.70 level continued to show signs of resistance as prices consolidated at this upper bound. As per usual, things started to quiet down come 2:30 PM, following a settlement of $3.674. It is clear that markets have been a little ugly lately; prices will continue to hover around the recent consolidation until markets make the next move. Have a great weekend, see you on Monday! -SM
July 15th, 2021 – Natural Gas Market Update | Today was yet another bumpy day in natural gas markets. Futures contract prices initially dipped in the morning but quickly made a run for the upper 3.60s. Gains were short lived as estimates calling for a higher weekly storage injection weighed on prices. The government’s release of the report brought in a net increase of 55 Bcf (billion cubic feet) for the week ending July 9th. This compares with an increase of 47 Bcf in the same week last year and the five-year average of 54 Bcf… not too far off. The response to this? Another 5-6 cent jump that slowly tapered off towards the settle of $3.614. Recent lows are being attributed to forecasts for lower air conditioning demand than expected over the next two weeks. While demand may be looking robust this week, next week could put a damper on heat until late July. On the other hand, watch out for the US dollar. With a breach of $1.26, the exchange rate is the highest it has been since April. See you tomorrow! -SM
July 14th, 2021 – Natural Gas Market Update | Natural gas prices moved 1% lower today ahead of tomorrows’ inventory report from the EIA. Unlike the last build, this week’s injection estimates are falling much closer to the five-year average. Analysts are expecting inventories to rise by 48 billion cubic feet which is much more on track with numbers typical of this time of year. Altogether, today brought another close in the red and consolidation is starting to become more evident. As we have mentioned a few times, markets will likely continue to trade sideways until a significant catalyst comes into play. $3.80 is quite the obstacle to get over while a move below $3.50 could be bad news for bullish traders. Yes, natural gas markets are more reluctant to gains lately, but is the end of the month after month rally? The truth is that it will probably take a lot more to turn the sentiment around. Mother nature is threatening warmer than normal weather for the next couple of weeks, and it will likely take more than a drop in exports to turn buyers into sellers. Make sure to tune back in tomorrow to get our weekly storage results! -SM
July 13th, 2021 – Natural Gas Market Update | Good afternoon folks. After another failed rally attempt yesterday, natural gas markets have pulled back and returned most of yesterday’s gains. Of primary concern, the August futures contract brought in a settle of $3.696. Analysts are noting that buying has faded in response to a mixed outlook in overnight forecasts and a slight decline in liquified natural gas export volumes. In terms of temperature updates, some days look hotter while others the opposite, the result: a muted response. In other news, storm activity out of the tropics is looking rather quiet and keeping prices afloat is the stagnant production underlying these markets. If you have been keeping up with our market updates, you cannot help but notice the pretty consistent day over day reversals. This volatility is something that we will continue to see, especially as we rely on the commodity to power areas needing to meet peak cooling periods. The ups and downs are distracting but technically the main trend is still upward. That being said, it is no secret that the momentum has been weakening since we began to see this sideways consolidation last week. As always, we’ll see you back tomorrow! -SM
July 12th, 2021 – Natural Gas Market Update | Natural gas markets opened this week with a bang as prompt month futures contracts were up over 2%. Prices slowed down in the afternoon as some clear resistance was seen in the low 3.70s. Distance above here seems to be a real area of contention the past couple of weeks. Overall, the August futures contract settled out the day at $3.749… a strong rally back from the 3.60s. As weather remains somewhat more constant lately, attention has turned to the support that we are seeing on a global scale. International prices are not slowing down and production can’t swoop in to keep them at bay. With that being said, constant temperatures don’t necessarily mean cool. Weather models are expecting widespread heat to persist through the end of July and into August, keeping air conditioners humming and likely maintaining upward pressure on demand deep into the summer. It is worth noting that most regions in North America historically hit peak summer temperatures next week. -SM
July 9th, 2021 – Natural Gas Market Update | Natural gas markets traded flat on Friday after posting a strong rally from Thursday’s smaller than expected storage injection. After trading as high as $3.742 intraday, the August futures contract settled at $3.674, almost on par with where we closed out during Thursday’s trading session. As we look back on the week, natural gas markets have spent a lot of time chopping back and forth. As soon as we thought the market was looking bearish, we have run into yet another turnaround in sentiment with prices approaching the top end of the trading range. If this bullish attitude can keep futures prices above $3.40, it is likely that traders will continue to buy the dips in price weakness keeping the major uptrend intact. With economies around the world continuing to reopen, demand for natural gas will follow suit behind. Strength may take a while to settle down as we look towards the fall temperatures in the next few months. All in all, its important to remember the amplitude of prices going into this year’s summer cooling season. We’ve said this many times, but cyclically and seasonally speaking, this is typically a negative time of the year for prices in this market. With uncharted territory comes unexpected results. Remove the uncertainty from your personal natural gas plans by considering a fixed-rate natural gas contract with Canadian RiteRate. -SM
July 8th, 2021 – Natural Gas Market Update | Good afternoon everyone. Following a smaller than expected build in natural gas stockpiles, future prices pushed higher to almost completely recover yesterday’s losses. If you’ve been checking out our posts regularly, you’ll know that Thursdays are important in the Natural gas world. Come 10:30 AM, the Energy Information Administration releases its weekly storage report detailing the amount of gas that has been pulled out of or injected into storage for the previous week. Analysts’ expectations for this week’s storage number called for an average injection of 28 Bcf (billion cubic feet) for the week ending July 2nd, 2021. Market prices jumped following the release, as 16 Bcf of gas was reported to be injected. With inventory levels sitting below the expected consensus, market players did not have quite the grip on natural gas markets that they thought. The market is at a point where it is trying to figure out where to go next. One day we’re down 2%, the next we’re right back where we started: volatility in a nutshell! See you tomorrow. -SM
July 7th, 2021 – Natural Gas Market Update | Natural gas futures have closed in negative territory again as they tempt the $3.50 level. Although markets initially tried to rally in the morning session, sellers had a different plan in mind. Some analysts believe that bulls are stepping down from the plate as tropical storm Elsa is turning out to be less severe than expected. One thing for certain is that the market is continuing to see a lot of volatility. Production can’t quite sit still after this week’s correction and another settlement in the red is helping to point towards the start of near-term retracement. Nonetheless, the weather is expected to remain warmer than normal for the next two weeks putting upward pressure on future cooling demand. Holding ground for today’s drop is Thursday’s EIA storage report. Expecting a below average build, tomorrow could show us what a hot week can do to natural gas inventory. Tune back in tomorrow for further commentary. -SM
July 6th, 2021 – Natural Gas Market Update | Natural gas futures were slightly higher at today’s open but began to decline as U.S. traders got back in their chairs. Highs were up from yesterday, but the 1% lower settlement spoke for itself. Before you get too excited about the price drop, we are still sitting in a solid trading range. Although the resistance is reassuring, it is going to take a lot more days like these to make any progress. We still have $0.30 of damage to do before we get close to the once daunting $3.40 level. The market tends to remember these key areas; and on top of that, the fundamentals are still leaning towards the bullish side. Weather for July 6th-15th looks less impressive than last week but remains hot enough to be considered bullish. Tropical storm “Elsa” has moved into the Gulf of Mexico but is expected to make its way east and up the U.S. coast. Most nat gas infrastructure should be unaffected by the storm but we will see if Elsa holds up to the Disney archetype over the next few days! – SM
July 5th, 2021 – Natural Gas Market Update | Happy Monday from warm and Sunny Toronto! Natural gas markets have been on an upward trend today with august futures contracts up roughly 2%. Aside from the move, it was a relatively quiet day in natural gas markets. With the Independence Day long weekend extending into today, trading volume was rather thin. That being said, day over day prices are slowly starting to work within a tighter bound. Following last week’s volatility, we might be seeing a bit of consolidation until a new pattern emerges. On the flip side, the recent heat wave has slightly subsided and the production drop that we saw at the end of last week have been resolved. In other news, a leak in an underwater gas pipe sparked a swirling fire that raged for hours in the Gulf of Mexico on Friday. Pemex, a large oil and gas player claims that the fire has not generated any gas spills. It is not a market moving incident, but it is quite a wicked sight to see! Tomorrow will likely bring more action with the Americans returning from holidays; we will see you then! -SM
July 2nd, 2021 – Natural Gas Market Update | Happy Friday folks and welcome to July! Natural gas markets have swung back and forth throughout the day, but the overall trend is upwards. Prices are underpinned by bullish July weather and a significant drop in production amid operational issues. The August futures contract brought home a settlement price of $3.70. Following up on yesterday, the storage report announced a stockpile increase of 76 Bcf (billion cubic feet) from the previous week, almost 10 Bcf above average estimates. Despite storage inventories pointing bearish, prices edged slightly higher before consolidating to tighter bounds in the afternoon. It is clear that traders were able to look past the EIA report and hang onto the hot temperatures following the weekend. At the end of the day, it is a tough time to be a seller in these markets and the strong prices are paving unfamiliar territory. What a start to the summer! -SM
June 30th, 2021 – Natural Gas Market Update | Today’s trading day reminded natural gas players what its like to see red on their screens. August futures contracts traded lower today but still fell within the range that we saw yesterday. Strong same day prices are helping to underpin markets as the NYMEX futures quotes catch up. Of course, these strong prices are the culprit of soaring cooling demand coming out of Western North America. Today’s pullback could suggest investor indecision going into the holiday weekend, or perhaps impending volatility for the next couple of weeks of summer. Regardless, the recent supply and demand imbalances could likely be the start of a bumpy ride over the next couple of weeks. Today did not bring any major changes, but exhaustion did show its face. Following the scorching hot temperatures lately, this week’s storage report is going to be an important one to watch. Early estimates are calling for a 67 billion cubic foot injection but the hot temperatures that caught the tail end of last week could drop this lower. With the Canada Day holiday tomorrow, the RiteRate team will be out of the office. Catch up with us on Friday as we evaluate where storage injections came in. Have a fantastic Canada Day folks! -SM
June 29th, 2021 – Natural Gas Market Update | If you have been keeping up with our market updates, you will know that the excessive summer heat has been a burning subject the past couple of days. Today is no different with natural gas futures surging to a 30-month high of $3.81 in the early session. However, that is not to say that prices completely stuck the landing. Early gains were upwards of 4%, but August future contracts only closed out the day 1.5% in the green.The heat wave in the Western United States is driving demand as gas-fired power generators keep air conditioners running. With gas overseas trading more than 3 times above U.S. prices, there is high incentive to keep exports up as well. In turn, prices are holding strong. Although analysts are projecting temperatures to be slightly milder next week, a major correction is not likely until the two-week forecast turns bearish.Today’s afternoon correction was a nice change from the constant upward momentum, but the market is not ready to call it quits yet. -SM
June 28th, 2021 – Natural Gas Market Update | It is safe to say that July natural gas futures have brought home quite the finish. Following last week’s nearly 9% gain in prices, markets continued to rally as we have broken the $3.60 level. With today marking the last day of trading for the July contract, traders will now turn their short-term focus to the month of August. Heat remains to be the underlying catalyst behind market movement lately; it seems like everyone is feeling it at this point. Temperatures look like they are here to stay for the next 10-14 days and could continue to support prices in the meantime. With production remaining flat and analysts forecasting increased demand following the Canada Day weekend, the market looks likely to continue higher. All puns aside, a move like this will eventually run out of gas. Once temperatures pull back to more reasonable levels, demand will fall, and traders will likely take advantage of the opportunity. Overall, prices have been in the green for several days and the once solid $3.40 resistance level feels more like a safety blanket at this point. Stay cool folks, we’ll see you back tomorrow! – SM
June 25th, 2021 – Natural Gas Market Update | Happy Friday everyone! We are definitely seeing a trend in natural gas pricing as we look to round out the month of June. The July natural gas NYMEX contract hit a new high of US$3.508/MMBtu today before coming down slightly and settling at US$3.496/MMBtu for the day. As per the usual format, the July NYMEX natural gas contract options expired today (futures expire next Monday!), contributing to the general direction of prices. Options are a type of financial derivative instrument that gives buyers the right to act if a certain price is met. Additionally, they are separated into two categories: calls (which give you the option to buy) and puts (which give you the option to sell). As a quick example: If I have a call option for US$3.50/MMBtu, this gives me the option to buy natural gas when the price exceeds $3.50 at $3.50. Given this, I would want the price of the July natural gas NYMEX contract to trade above this value to be able to utilize my option. For the July natural gas options (both calls and puts) this was exactly the case. There was a lot of options traded at the $3.50 mark, which helped in driving prices upwards this past week. This point being noted though, there are still other factors at play, such as our natural gas fundamentals. Our longtime readers have probably concluded as well that we are definitely seeing a general shift upwards. They’ll also probably be able to help us on sharing the possibility of forgetting about future price increases by locking in to a RiteRate fixed rate natural gas agreement for the next one, three, or five year period! Learn more about how our solution works by giving us a call at 1-877-866-8056. ~CL
June 24th, 2021 – Natural Gas Market Update | Natural gas markets continued to rally today following the storage report from the Energy Information Administration (EIA). According to the EIA, last week’s storage build clocked in at 55 Bcf (billion cubic feet), which is over 10 Bcf less than yesterday’s average estimate. That compares to an increase of 115 Bcf injection in the same week last year; the difference is astounding. With less supply available to meet demand needs, it is safe to say a bullish response was expected. Prices continued to plow forward as July futures broke the dreaded $3.40 resistance level in the early afternoon and stuck around for the remainder of the trading session. The early summer weather has certainly been a catalyst for the recent highs that we have been seeing. Last week’s scorching heat in southwestern United States forced a lot of Americans to dial down their thermostats. If you plan on staying cool in these conditions, you will need lots of fuel-based power generators to keep those air conditioners humming! -SM
June 23rd, 2021 – Natural Gas Market Update | Good afternoon folks. July natural gas futures rallied another 2.5% over the course of the trading session today setting a contract high. Prices quickly tempted the major $3.40 resistance level in the morning but eventually meandered their way back down to where they kicked off the day. With production levels down and overnight weather data holding onto the warmer trend for the next 10-15 days, the push upwards is understandable. As we get towards the end of June, traders are slowly starting to take their eyes off the July prices and look ahead to August and September. This week’s storage build will be a good indicator of where supply levels sit for this transition. Expectations are calling for an average injection of 66 billion cubic feet. If the report comes in lower than expected, we may see a bullish response. Tune in tomorrow to see where we sit. -SM
June 22nd, 2021 – Natural Gas Market Update | Natural gas futures have proven some resilience today with a 2% increase to a high of $3.281. Along with a drop in production, the rally upwards could be a result of volatile trading in preparation for the core heat months of July and August. It is clear that a hotter than normal pattern is expected in early July, but the question still remains: just how hot? If it is any consolation, July forecasts are calling for relatively stable temperatures with no extreme events. It is important to keep in mind that the market sentiment has been positive overall. With the world’s economies reopening, demand for fuel is picking up and production just cannot seem to keep the same pace. At the end of the day, higher prices should give producers incentive to bring more gas to the table; it’s just a matter of when and where. -SM
June 21st, 2021 – Natural Gas Market Update | Happy Monday and welcome back to all our readers out there. Natural gas futures have been trading lower since Friday with July contract prices settling at $3.19 today. Analysts believe that recent downward momentum could be the culprit of overestimated demand following the heatwaves in Western United States. Further adding to the bearish puzzle is the subsiding of tropical storm Claudette after threatening areas along the Gulf Coast. Nonetheless, some upside was eventually found in the afternoon trading session with a high around $3.21. Although the last couple of days have been on a bit of a downtrend, it is important to note that nat gas prices are nearly twice as high as they were approaching July and August last year. As you may know, the summer heat brings air conditioning demand which is fueled by natural gas power generation. If prices are considered hefty now, they could feel a lot worse when people start cranking their thermostat down in a couple weeks. Consider one of RiteRate’s fixed rate natural gas plans before it’s too late! -SM
June 18th, 2021 – Natural Gas Market Update | Happy Friday folks, another week for the books! Natural gas futures are trading lower today but are attempting to rebound from weakness early in the trading session this morning. Curving prices last night was an update from Enbridge on their major Texas Eastern pipeline, TETCO. Their message implied that they will be able to add 0.2 – 0.4 billion cubic feet in southbound flows over the next month. As a lingering issue for the past couple of weeks, the good news is forcing traders to loosen their foot on the pedal. As we look ahead to next week, early storage estimates call for another modest build that is reflected by the intense heat in western areas of the United States. Afternoon prices are being supported by warm long-term weather, while gains are being capped by the cooler forecasts for the upcoming week. With the Father’s Day weekend approaching, the RiteRate team would like to wish you a fantastic weekend! -SM
June 17th, 2021 – Natural Gas Market Update | Good morning everyone, it is storage day in the natural gas world! Future prices edged slightly lower this morning in preparation for the government’s storage report at 10:30AM. Holding ground for prices was lower production levels, rising global demand, and the supposed heat to be coming towards the end of June. As mentioned yesterday, average estimates were calling for a 72 Bcf (billion cubic feet) injection, while actual reports noted a bullish 67 Bcf. side from a small dip in prices, the market did not quite know how to react to the report. Typically, when storage results come in lower than estimates, supply levels are less than accounted for and prices jump in response. It is important to keep in mind that the recent TETCO outage and surge in power burning made this storage build difficult to gauge. -SM
June 16th, 2021 – Natural Gas Market Update | After ending the five-day ‘winning streak’ in prices yesterday, natural gas futures continued to fall this morning but were supported at the $3.20 level. Analysts are attributing yesterday’s decline to traders selling their positions and yielding profits rather than any change in core fundamentals. Keeping traders from reaping more profit-taking today is strong expected cooling demand for the end of June and a lower-than-average storage build prediction for tomorrow’s weekly report. Early estimates are calling for an average injection of 72 Bcf (billion cubic feet) which is well below the 87 Bcf five-year average. With less gas being put into storage than usual, the concern is that there will be less supply to pull from and prices will be supported upwards. Overall, the estimates for tomorrow seem bullish and the late morning rebound to $3.27 is supportive of this. Tomorrow we will find out if natural gas buyers are bound to get their way again. -SM
June 15th, 2021 – Natural Gas Market Update | Good afternoon folks! July nat-gas futures pulled back 4% today, returning the gains that were accumulated yesterday and late last week. Though the recent highs coming into this mornings’ session were built off pipeline driven supply pressures and heat-related demand, there has seemed to be a shift in the overall market sentiment. With market fundamentals proving bullish lately, analysts note that weather demand will always be the volatile variable to throw a wrench in the gears. Today’s price dip could be a classic case of market recovery or a result of changing weather outlook. Regardless, we have learnt that the supply and demand balances of natural gas markets are not as steady as we thought. Make sure to tune back in tomorrow to see if this downward price action persists. -SM
June 14th, 2021 – Natural Gas Market Update | The start of a new week has brought some interesting price action to natural gas markets. July futures saw a short-lived duck in the early session which was followed by an afternoon rally to a high of $3.364. Helping to underpin prices is last Friday’s warning that a major natural gas pipeline could have restrictions in place to last the entire summer through the end of September. Any withering in the situation’s significance could potentially erase prices to levels similar of mid-last week. However, support is aided by 15-day weather reports indicating an intense heatwave hitting the US Rockies and western areas of the country. We are now sitting at a unique threshold for natural gas prices. Today brought our first settlement above the dreaded $3.300 resistance level and yet another multi month high for natural gas futures. With US power generation hitting June records, supply just can’t quite keep up with demand. It is important to note that this behaviour is not typical for natural gas prices in June; it will be interesting to see if markets continue to hold. -SM
June 11th, 2021 – Natural Gas Market Update | Although you may pack up your bags at the end of the day and call it quits until the AM, natural gas markets must keep rolling. An after-hours rally was triggered last night upon a recent announcement regarding Enbridge’s Eastern Texas pipeline (TETCO). Earlier in the week we discussed how TETCO was forced to reduce its flow under maximum operating pressure. Last night’s update stated that the earliest the pipeline will be returned to full service would be late in 3rd quarter of 2021. Speculation pushed prices upwards of $3.26 overnight and Friday’s bullish fundamentals underpinned prices throughout the day. Analysts believe that later session gains were held strong due to increases in US exports and steady heat patterns over the next 8-14 days. Overall, the surge reflected a multi-year high of $3.30. Today was simply another reminder that you can never let your guard down when dealing with natural gas. Our energy professionals at RiteRate are here to protect you, and your wallets from adverse market changes like today. -SM
June 10th, 2021 – Natural Gas Market Update | Natural gas futures kicked off the trading day with a 16-week high of $3.200 shortly before the release of the weekly government storage report. Coming into the report, traders called for a sizeable injection with an average estimate of 97 Bcf (billion cubic feet). Come 10:30AM the market saw slight downward momentum with a rather spot on actual injection of 98 Bcf; prices winded down to a $3.149 settlement and a $3.131 close. Despite the relatively large storage build, strengthening heat continues to support prices bound by higher air conditioning demand. That being said, the next couple injections are likely to return to smaller builds more characteristic of this time of year. As we begin to roll into the summer months, the potential for hotter patterns could translate into higher natural gas rates at the residential level. Beat the summer heat with a fixed rate natural gas plan with RiteRate! -SM
June 9th, 2021 – Natural Gas Market Update | Happy midweek folks! Today’s trading seemed to portray recovery after yesterday’s attempt to break to the upside. Aside from a small rally to $3.16 in the early session, natural gas futures traded relatively flat over the course of the trading day. The level out in prices may be a result of weaker cash prices and a slight bounce back in production overnight as select Appalachian pipes resolved their maintenance. Before you get too comfortable, it is important to note that markets remain in arms reach of the $3.204 high on May 17th. A strong 10–15-day weather forecast could be the catalyst that they are looking for to make another push back to this benchmark. With Thursday’s weekly storage report, we will gain insight into how supportive storage injections were for the previous week. Make sure to tune back in tomorrow to stay up to date with the recent outlook for natural gas. -SM
June 8th, 2021 – Natural Gas Market Update | When it comes to natural gas, it is important to watch out for the unique caveats underlying weather-based demand. Although natural gas demand typically peaks during the colder months and tapers off during the warmer ones, today showed us what warm temperatures can do to natural gas prices. July futures were sent rallying to $3.18 today in response to recent cooling demand expectations. More specifically, the European weather model report showed an increase in projected cooling demand days (CDDs) for the upcoming weeks, thus anticipating more natural gas needed to run power generators. The market was still challenged by the major resistance barrier at $3.20 as there still does not seem to be enough bullish indicators to support a push past this benchmark. Capped gains could also be a result of large supply and a decline in LNG feedgas demand. Of course, this LNG pullback was somewhat expected after last month’s record highs. -SM
June 7th, 2021 – Natural Gas Market Update | Welcome back to another week of market updates from the RiteRate team. Natural gas futures slipped 6.5 cents to $3.033 this morning and continued to mull back and forth between the $3.00 and the $3.10 level throughout the day. With natural gas markets being heavily oversupplied and selling pressure remaining prevalent north of $3.10, it is likely that we will continue to see this variable behaviour in the future. With few fundamental changes in natural gas markets, traders will focus on the possibility of heat returning to the forecast and lingering pipeline issues from Friday. To quickly summarize, the U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA) refused to renew a permit to allow Enbridge’s Texas Eastern Pipeline (TETCO) to operate at full maximum operating pressure. Speculators reacted with a midday spike on Friday’s trading session, but any significant price changes will depend on the event’s duration. Of course, if anything does come up, we will be sure to keep you updated here! -SM
June 4th, 2021 – Natural Gas Market Update | Good afternoon folks! Friday is finally here, and the weekend is approaching, but today’s market action still highlights trader indecision about the early week buzz. Natural gas futures traded back and forth throughout the day showing volatility above US$3.00. Early session gains were quickly lost but eventually brought back to a high of US$3.12 after a few hours of trading sideways. Despite fundamental factors not being enough to spark a significant rally, there seems to be sufficient bullish support to prevent a large breakdown in price. Nonetheless, it is important to keep in mind that June is expected to be hot; we will all have to keep those air conditioners humming somehow! On another note, if you are looking to get more familiar with natural gas, our educational series has made a comeback! Check out our most recent post to learn how the basic elements of supply and demand determine natural gas prices. -SM
June 3rd, 2021 – Natural Gas Market Update | Hello folks and welcome back to another natural gas market update from the team at RiteRate. Expectations for a storage injection in the mid to upper 90s were met today when the EIA announced that storage facilities across the United States injected 98 billion cubic feet of natural gas for the previous week ending May 28th. Given that the report did not significantly deviate from the expected range, price action today was muted as a response. Traders look ahead to a constructive outlook for the summer and the upcoming winter where supply and demand balances will be tighter than this first week of June. Should these expectations come to fruition, prices likely have more significant upside risk than downside risks posed by bearish weather or additional supply coming into the market. -EG
June 2nd, 2021 – Natural Gas Market Update | Good afternoon to all of our market update readers out there. As we look at today’s price action, prompt month natural gas futures are edging lower from yesterday’s 5% increase. Today’s $0.04 retracement tested the attitude of bulls as natural gas future prices remained well below the $3.10 support level that we saw yesterday. Although production dropped another 1 Bcf (billion cubic feet) this morning, the price breakdown can likely be attributed to a slight pullback in the 10–15-day weather forecast. Trader’s also may be recovering from a good old case of market spook as warm temperatures and slow production came as a bit of a surprise. Looking at tomorrow’s storage report from the U.S. Energy Information Administration, estimates remain steady at an average of 95-96 Bcf. Make sure to tune in tomorrow to see how storage injections will affect the supply and demand balance of natural gas. -SM
June 1st, 2021 – Natural Gas Market Update | Unlike the Toronto Maple Leafs last night, natural gas markets came out on fire today. July futures were up 5% with a high of $3.15 and support around the $3.10 level. Supporting this price action is a recent production drop of 3 billion cubic feet. Gains are also likely in preparation for hotter than expected temperatures over the upcoming weekend and mid-June. Although short term U.S weather forecasts are calling for comfortable temperatures this week, highs of upper 80s and 100s in southern states will push heating demand for the second week of June. Some analysts believe that we may see a price breakdown that is predictable of this time of year. However, it is important to remember that current natural gas markets have several bullish factors such as high global demand and flat long-term production. -SM
May 31st, 2021 – Natural Gas Market Update | Happy Monday and welcome back folks! Today has been a relatively slow day of trading due to the Memorial Day holiday in the United States. Natural gas futures slightly gapped up to $3.04 this morning and have held steady around this price. It is likely that the markets will continue to trade sideways until warmer temperatures fill up certain parts of the United States or we see a significant catalyst come into play. With today being slower, here are a couple things to watch for this week: Storage estimates for the week ending May 28th, 2021 are calling for 95.3 Bcf (billion cubic feet) of gas being injected into storage. With this value sitting fairy similar to both last year’s same week average and the 5-year average, market speculation remains minimal. Also looking ahead this week, our educational series is looking to make a return under the “Natural Gas 101 with RiteRate!” post. Stay tuned for the official update later this week! -SM
May 28th, 2021 – Natural Gas Market Update | Happy Friday everyone, last one of May, how time flies! Today played out to be quite the trading day. The July prompt month natural gas contract climbed steeply early on today, hitting a high of US$3.042/MMBtu before backing down and settling just under three cents up from yesterday. As many of us are already feeling it (the snow was quite the surprise!), this weekend’s cold shot has definitely influenced a wide trading range. Additionally, Monday marks the Memorial Day holiday in the U.S., so next-day gas prices will cover Saturday to Monday as markets stay closed. Prices are expected to settle back down past this weekend, but the forecast calls for heat around June 11th. A lot continues to happen day over day, so make sure you never miss anything by coming by and checking-in with RiteRate’s Natural Gas Market Update! ~CL
May 27th, 2021 – Natural Gas Market Update | Today was an important day in the natural gas world as traders kept an eye out for a couple big events. Alongside the weekly storage report from the EIA, today also marked the first day of July NYMEX natural gas trading as the prompt month. Despite the contract turnover, July traded at its relative high in the early session this morning. Following the report’s release however, we saw a significant downward shift in this behavior. While the industry average came in around 105 Bcf, the actual report clocked in a 115 Bcf injection. With a 10 Bcf difference, the above average injection created selling pressure amongst traders and resulted in a $0.10 drop in future prices. Before you get too excited about lower prices, analysts believe that this could be the only three-digit increase for 2021. The forecasts for both the current and upcoming week point to a tighter market which is expected to boost power burn demand and leave less available gas in storage. With fewer supply to draw upon, it is possible to see an increase in prices. Consider locking in a fixed natural gas rate now before prices climb back to higher levels. -SM
May 26th, 2021 – Natural Gas Market Update | Good afternoon everyone! Today marks the settlement for the June natural gas futures contract. With it set to roll off the board following today’s close, traders will be looking at July future prices which are sitting just above the $3.00 mark. Heightened volatility is expected over the next couple of days as natural gas players adjust to the new prompt month. Despite the new contract, it is unlikely that we are done playing ping pong with the $3.00 price level until we reach the summer months. More typical seasonal temperatures should keep natural gas prices from wandering too far away from this benchmark. As we approach tomorrows trading session, natural gas players await the EIA storage report to evaluate the supply and demand balances from the previous week. With storage inventories filling up fast, be sure to check in with us tomorrow for the results. -SM
May 25th, 2021 – Natural Gas Market Update | Happy Tuesday folks, we hope you had a safe and restful long weekend. The past couple of days are a great example of the week-to-week differences in the natural gas markets. It was just a week ago when natural gas futures were testing multi-month highs and now, they have finally broken a 5-day losing streak. With prices dropping below the $2.85 mark yesterday, we are seeing recovery as prices climb to $2.93 in today’s session. Perhaps all the fireworks this weekend kept the traders up at night thinking about their losses! This may be the last bearish move in the market ahead of the summer cooling season and international LNG (liquified natural gas) demand from last year’s frigid temperatures in Europe and Asia is supportive of this. As you can see from the past week’s volatility, natural gas markets can be all over the board. As the June contract looks to rollover tomorrow, we expect price fluctuations to continue. -SM
May 21st, 2021 – Natural Gas Market Update | Happy Friday everyone, it is almost time to enjoy the May 24 long weekend. As we look back on the week, it is evident that natural gas markets have been a little noisy. However, prices are seeming to cool off a bit. Natural gas futures settled $0.19 lower than yesterday but still traded within the $2.90-$2.98 range that we have been seeing consistently. As we look to round out the shoulder season and enter the summer, now could be a great time to lock-in a fixed rate natural gas plan with RiteRate. With analysts predicting a constructive market outlook and a hot summer, we could see higher prices in the future. By locking in a steady fixed rate now, you won’t have to worry about how the market reacts. With Victoria Day approaching in Canada and the markets being closed on Monday, the RiteRate team would like to wish you a safe and wonderful long weekend! -SM
May 20th, 2021 – Natural Gas Market Update | Yesterday we left off on a Back to the Future reference explaining our lack of ability to predict oncoming market changes. Today however, we can assure you that the Toronto Maple Leafs will take home their first playoff game win tonight! Just as hockey fans await the game, gas market players anticipated this morning’s EIA storage report to benchmark how much supply there is to draw upon. Projections called for an average injection of 61 Bcf (billion cubic feet) while the actual report totalled an implied flow of 71 Bcf. The report set a bearish pace for the markets today as we saw June natural gas futures pull back to $2.90 where we saw prices sit last week. It is likely that prices will stick within this narrow range as traders liquidate their positions before the long weekend. Unlike Toronto’s roster, today showed us that the natural gas markets may not be as balanced as we think. At RiteRate we are here to anticipate these supply and demand balances for you. Give us a call at 1-877-866-80956 for more information. Go Leafs go! -SM
May 19th, 2021 – Natural Gas Market Update | If time travel were possible, today’s sideways price action alone would convince me that we fell back a week. Monday and Tuesday’s bullish attitude was tested today as natural gas futures dropped below the $3.00 mark in the early session and hovered around $2.95. Nonetheless, warmer short-term weather will likely continue to introduce price changes. It is safe to say that commodity prices have gotten a large push, and yes natural gas has gotten a bit of a helping hand. But at the end of the day, it is still a commodity that is heavy in supply. Healthy storage injections are likely to be supported by large-population states such as Texas with very comfortable spring temperatures. By sitting in the midground between turning the heat back on and cranking up the AC, less natural gas is being consumed. Although Marty McFly might have some tricks to teach us, we cannot travel back to the future and plan for these sudden jumps in prices. Let our energy professionals at RiteRate protect you from market changes and keep your budget on track. -SM
May 18th, 2021 – Natural Gas Market Update | Happy Tuesday everyone! Natural gas futures have pulled back $0.10 from yesterday’s multi month high but are still sitting above the $3.00 level in today’s session as seen in the picture below. Analysts believe that the recent declines in exports and the steady global demand for liquified natural gas is keeping prices in check after the significant rally on Monday. As we begin to enter the warmer summer months, weather will be the primary consideration for trading decisions as power generators burn more gas to produce electricity for air conditioning use. If you are wondering how one of RiteRate’s fixed rate natural gas plans can help protect you from volatile natural gas rates, be sure to visit Your Home or Learn More on our website. -SM
May 17th, 2021 – Natural Gas Market Update | Good afternoon folks. Natural gas markets rallied to a three-month high in today’s session rising upwards of 6% to $3.14. The break in the $3.00 resistance level marks the 5th straight weekly increase and has sparked more buying. Analysts believe that the price increase is due to warmer than normal weather that is forecasted to cover eastern United States in the upcoming 1-2 weeks. In the natural gas market, cooling accounts for majority of the demand over the summer, thus representing this behaviour. Prices are expected to remain at these levels for the time being but as we know, natural gas markets are subject to change. Check back in throughout the week to stay updated with the recent price action. -SM
May 14th, 2021 – Natural Gas Market Update | Hello and happy Friday everyone! This morning started with a jump as natural gas futures traded at a 12-week high of $3.01 in the early session before coming back down to the $2.95 level. Of course, this narrow price movement and resistance at the $3.00 level has not been unfamiliar in the shoulder month of May. We have consistently seen prices trade sideways in absence of a catalyst and as homeowners switch their furnaces on and off. However, weather driven demand is finally expected to fade in the second half of the month as more comfortable spring temperatures spread across northern regions. The cooling demand following hotter temperatures will not take effect for another few weeks and larger storage injections will build in preparation. With the current market softening and analysts predicting a hot summer, now may be a good time to lock-in a fixed rate natural gas plan with RiteRate. -SM
May 13th, 2021 – Natural Gas Market Update | Happy Thursday everyone! Today traders look to the weekly EIA storage report to detail the amount of gas that has been injected into or pulled out of storage for the previous week. Analysts’ expectations for this week’s storage injection numbers were an average of 75 Bcf (billion cubic feet). In the early session this morning, natural gas futures were trading lower, but market prices jumped 4 cents as the report showed a smaller than expected increase of 71 Bcf. In comparison to last year’s same-week injection of 104 Bcf and the 5-year average build of 89 Bcf, we can see that the current storage reflects a slightly bullish supply and demand balance. Despite this being the third relatively large storage build in a row, (that means prices should be falling) prices continue to trade within the upper bounds nearing $3.00. -SM
May 12th, 2021 – Natural Gas Market Update | Good afternoon folks! We have an interesting natural gas market update today as the eventful week has brought another pipeline issue to North America. Today marks the last day of legal operation for Enbridge’s Line 5 pipeline after Michigan Governor Whitmer set a shut-down deadline last November regarding environmental concerns. The pipeline serves as a vital artery for North America’s energy infrastructure carrying 540,000 barrels of Canadian crude oil and supplying 50% of Ontario and Quebec’s fuel. Whitmer referred to Line 5 as a “ticking time bomb” while Enbridge insists that the construction from 1953 is safe and has never been subject to an oil spill. If the easement were to follow through, we could see detrimental impacts on Canada’s economy, energy security, and relationship with the United States. Although it seems unlikely to take effect, shutdown could result in an increase in western Canada natural gas prices. Aside from this major event, we are still seeing a weak weather demand in natural gas products. Although cool temperatures are looking to fade by next week, some analysts believe that it could take another three weeks for cooling demand to kick in. Tune back in tomorrow for commentary on the weekly natural gas storage report from the U.S. Energy Information Administration. -SM
May 11th, 2021 – Natural Gas Market Update | Hello everyone, welcome back to yet another daily market update from the RiteRate team. To follow up on yesterday’s story on the Colonial Pipeline, sources explain that the pipeline is aiming towards being back up and running by the end of the week. With that being said, we still hold our viewpoint that there will be minimal impact on natural gas markets. If there is any significant movement in the story, we will be sure to keep you updated here! In contrast to the relatively light price movement yesterday, we are seeing some upward support on the summer natural gas futures contracts today. Prices broke beneath the $2.90 level earlier this morning, before bottoming out at $2.88 for the session and have been slowing climbing throughout the day. The price rebound today adds to the long list of market swings that we have seen in the past. With RiteRate’s fixed rate plan, we can offer stability among the ever so changing market. -SM
May 10th, 2021 – Natural Gas Market Update | Good afternoon and happy Monday everyone. The start of a new week has brought some big news in the energy sector as the United States’ largest fuel pipeline has been shut down since Friday after a cybersecurity attack. The attack is unlikely to have significant effects on natural gas prices in the upcoming days, however we may see small influence on natural gas prices if the outage occurs for a long period of time. Regardless of this attack, it still seems that June futures prices will continue to trade between $2.90 and $3.00 until a significant catalyst comes into play. It looks like traders are having a hard time buying strength without a fundamental change to production or demand of natural gas at this time of year. Moreover, we may see downward pressure on the price of natural gas this week as temperatures finally begin to warm up in Canada and the United States. Make sure to stay updated on any price fluctuations throughout the week with our daily market updates! -SM
May 7th, 2021 – Natural Gas Market Update | Happy Friday everyone, we have finally made it through the week! As we look back on the last few days of trading, prices of the June natural gas futures contract have traded within a narrow band between $2.90 and $3.00 as seen in the chart below. This price action reflects the lack of any significant fundamental factor driving the prices up or down, which is typical for the low demand shoulder season between the winter and summer. Prices will likely trade sideways to lower as we approach a seasonal low point of natural gas consumption for this period of the year. However, we expect that a tighter supply and demand balance in the summer and fall will support higher prices in the near future. The low rates that we are offering today will not stick around forever so be sure to consider one of our fixed rate natural gas plans to help manage your energy costs. With the Mother’s Day holiday on Sunday, the RiteRate team would like to wish you a wonderful weekend. -SM
May 6th, 2021 – Natural Gas Market Update | Happy Thursday folks! The markets have been relatively stable today after the U.S. Energy Information Administration released their weekly storage report. Yesterday’s estimated injection numbers were very tight to the report with a recorded 60 billion cubic feet that were put into storage. As a result, the prompt month futures contracts traded within 5 cents to yesterday, thus showing minimal impact on the market today. Although today was rather quiet in trading, prices can change quickly as we have seen throughout February and April. As we begin to enter a more demand intensive period over the summer, this may be a good time to consider one of RiteRate’s fixed rate natural gas plans. For more information Visit the Home and Business tabs, or give us a call at (416) 862-0322 to learn how we can help you manage your energy costs. -SM
May 5th, 2021 – Natural Gas Market Update | Good afternoon everyone. It is another cold afternoon with a cool weather system that will be supporting natural gas demand through the middle part of May. Despite this increase in demand, we saw that the June natural gas futures contract traded in a narrow range ultimately settling down 1% to 2.938. Market participants are looking ahead to the EIA storage report where utilities across the United States likely injected a range of 49-76 billion cubic feet of natural gas into storage. Because this is much lower in comparison to the 5-year average, we expect that this will be supportive of natural gas prices in the weeks ahead. Be sure to check out our market update tomorrow to see the results and additional commentary! -SM
May 4th, 2021 – Natural Gas Market Update | Happy Tuesday everyone! The June natural gas NYMEX contract continued to bump around today, hitting a high of US$3.00/MMBtu before settling basically unchanged from yesterday. Colder weather continues to remain a possibility into mid-May, and production continues to sit at a low even compared to last month, coming in slightly above 88.5 billion cubic feet (Bcf). The demand supply balance looks rather tight for the time being, but as long time readers probably know, the market could remain unchanged or change in a heartbeat. Make sure to never miss an update by tuning back-in tomorrow to get the latest on natural gas news! ~CL
May 3rd, 2021 – Natural Gas Market Update | Happy Monday and welcome to May everyone! The May prompt month NYMEX natural gas contract traded over quite the range today hitting a low of US$2.90/MMBtu early on the day before climbing to US$2.975/MMBtu. The contract settled three cents up from Friday but continues to trade steady at the time of writing just under the US$2.97/MMBtu mark. Some colder and wetter weather is expected for the coming week, dropping below number and holding up to mid-May before a recovery closer to the 10-year average. Production also continues to be on the decline but as mentioned previously, a recovery is expected as we pass April maintenance season. Although natural gas news is quieter now compared to the winter, there still is quite a bit changing. Make sure to tune back in tomorrow to stay up to date with our daily natural gas market update! ~CL
April 30th, 2021 – Natural Gas Market Update | Happy Friday everyone, can’t believe we’ve already made it to the last one of April! Today marked a relative quiet trading day. The June NYMEX natural gas contract did make a slight following yesterday’s drop, settling US$0.02/MMBtu higher. Not much has changed in terms of fundamentals, and May is expected to return closer to normal with maintenance ending and weather forecasted to be closer to normal. As the market looks to soften a bit, now could be a great time to lock-in a fixed rate natural gas with RiteRate. While the general market outlook is bullish, meaning higher prices in the future, by locking one steady rate now, you won’t have to worry about what the market does. Make sure to visit our Home and Business sections, or give us a call at (416) 862-0322 to learn about how we can help you! ~CL
April 29th, 2021 – Natural Gas Market Update | Happy Thursday everyone! Today marked the first day of the June NYMEX natural gas trading as the prompt month. Following the momentum of the May contract yesterday prior to settlement, June traded near it’s relative high. Following the release of the U.S. Energy Information Administration storage report this week however, we saw quite a steep reversal. The industry average estimate came in at 11 billion cubic feet (Bcf), with a quite a wide range from a withdrawal of 2 Bcf to a injection of 28 Bcf. The actual report came in at 15 Bcf, just slightly over the average but enough to create bearish momentum, with the June contract settling US$0.049/MMBtu down from yesterday. ~CL
April 28th, 2021 – Natural Gas Market Update | Happy Wednesday folks. Today marked the settlement for the May natural gas futures contract. Prices for the prompt month appreciated $0.052 to close out the session at $2.925 with subsequent contracts for the balance of the summer and the winter settled modestly higher. The rally observed in recent weeks has been driven by pipeline maintenance that has led to declines in natural gas production levels. In combination with additional weather-driven demand throughout the month of April, balances have tightened, however both of these factors may be short-lived in duration. Heading into tomorrow’s trading session, market participants look towards the storage report from the EIA for a glimpse into the supply and demand balance for the previous week. Be sure to check in with us tomorrow afternoon for the results. ~EG
April 27th, 2021 – Natural Gas Market Update | Following yesterday’s price rally, the May prompt month NYMEX natural gas contract continued to climb, settling US$0.083/MMBtu up from yesterday. The rising prices continue to result from dropping production levels reported in the lower-48. Tomorrow will mark the last trading day of the May contract, so it will be interesting to see the battle between the current fundamentals and market participants as they look to offset their open positions. Temperatures going into May look to remain mild for the time being, so no major change in demand on the current horizon. Make sure to tune back in tomorrow to catch up with our market update. ~CL
April 26th, 2021 – Natural Gas Market Update | Happy Monday folks. Natural gas futures prices displayed a strong showing to start out the week, surging upwards from Friday’s settlement of $2.73 to $2.79. Today’s price action marks a higher high week-over-week, indicating that the commodity is trending in the positive direction. Recall that last on last Thursday, the market jumped $0.10 on the bullish storage report from the EIA that indicated that 10 billion cubic feet less natural gas was injected into storage than market participants expected. As April draws to a close and demand for space heating decreases during the so-called the shoulder season for natural gas, prices may pullback or consolidate around the current level; however, traders may be to hesitant to enter into any new short positions now that prices have found considerable support for the past few weeks. ~EG
April 23rd. 2021 – Natural Gas Market Update | As we all continue to remain in lock down the warm weather will be moving in lowering the short-term cash markets. Canada is projected to decrease exports to the US by 1.5 BCF per day amid the warming trends in the North East states followed by the mid-continent markets. As the market works through this shoulder season, we will see short term prices rather choppy until we are able to forecast with more certainty the upcoming summer air conditioning demand and the following winter projections. Natural Gas production continues to remain the main factor in driving natural gas prices; producers are limited on their capital drilling programs and continue to buy back shares in order to better control their longer term cashflow. Stay safe, stay home and enjoy the sunshine. (RS)
April 22nd, 2021 – Natural Gas Market Update | Happy Thursday everyone. The prompt month May NYMEX natural gas contract saw a big move today, settling US$0.057/MMBtu up from yesterday. The main catalyst for today’s move was the U.S. Energy Information Administration’s weekly storage report. While the market consensus estimate came in at 48 billion cubic feet (Bcf) with many leading analysts above that, the actual number came in at a low of 38 Bcf. As a reminder, a smaller than expected injection is bullish, meaning that prices will be expected to increase. As storage looks to balance the supply and demand that exists in the market, a smaller than expected injection signals that there is less natural gas available, either from higher demand or lower supply. ~CL
April 21st, 2021 – Natural Gas Market Update | Halfway through the week. Happy Wednesday folks! Prices for natural gas futures have pulled back after appreciating steadily over the past two weeks. Price action suggests that traders are taking profits as we head into the release of the storage report on Thursday. We may see that the $2.75 level represents the upper band of the trading range for this lower-demand shoulder season found throughout the later half of April into the month of May. The colder weather that has descended upon most of the continental United States and Canada in the current week has begun to subside in the 15-day weather forecast. Additionally, we have observed that production levels have rebounded modestly by 0.8 bcf/day. This recovery comes after daily output has fallen roughly 1.8 bcf/day over the past eight gas days. With these fundamental mechanisms moving away from supportive conditions, we may see the prompt month contract for NYMEX gas futures pull back to the high 2.50s before the end of the month, however, Thursday’s EIA report will likely control the short term momentum of the contract. ~EG
April 20th, 2021 – Natural Gas Market Update | Happy Tuesday! After the prompt month May NYMEX contract saw its eighth gain day over the past nine days yesterday, it finally settled down US$0.022/MMBtu, still above the US$2.70/MMBtu mark. Ongoing maintenance continues to affect production, with volumes hitting a monthly low of 87.9 billion cubic feet (Bcf)/day today. However, this is now being offset by weather warming, leading to demand revisions that sit nearly 10 Bcf lower. Prices now trade within a higher range, and will most likely stay above US$2.70/MMBtu but below US$2.75/MMBtu. We have recently been getting questions on how the prompt month NYMEX contract affects natural gas prices in Canada. The NYMEX contract is based at what is known as the pricing benchmark at Henry Hub down in Louisiana. Therefore, all activity in the lower 48 such as demand, supply, and storage injections and withdrawals will have a direct affect on pricing. Natural gas prices at other locations can all be thought of as a differential to the NYMEX contract, which you can think of as general movements in the NYMEX also occurring in the Canadian marketplace. Therefore, as you hear about rising NYMEX prices for the long term, you might want to consider a fixed-rate natural gas contract with RiteRate. We utilize our supplier relationships and proactive management to ensure that for your preferred term, you will be able to pay one steady rate, no matter what the NYMEX does. Visit our site for Home and Business plans, or give us a call at (416) 862-0322 to learn how we can help you! ~CL
April 19th, 2021 – Natural Gas Market Update | Welcome back to another market update from the RiteRate team. Prices for natural gas futures closed higher today in a continued show of strength. A combination of bullish factors have tightened the balance of supply and demand since the start of April. The latest 15-day weather forecasts have shifted colder, adding even more gas-weighted degree days to the near term outlook. This weather will support stronger domestic demand than previously forecast. Additionally, maintenance-driven declines in production have levels 2.5 bcf/day off a peak since April 1st. ~EG
April 16th, 2021 – Natural Gas Market Update | Happy Friday everyone, another one come and gone!To round off the week, prices traded relatively stable today within a four cent range, settling two cents up from yesterday. Since hitting a low on April 6th, the prompt month May NYMEX contract has climbed nearly 25 cents. The most recent climb yesterday was attributable to a bullish Energy Information Administration storage report coming in at 61 billion cubic feet (Bcf) as opposed to the market consensus average at 68 Bcf. Prices look to continue to climb as pandemic recovery continues alongside changes in production and demand. Make sure to take advantage of RiteRate’s fixed price natural gas contract. While market prices continue to climb, you will be able to pay one steady rate for your preferred term! Make sure to visit our Home or Business tab for more information, or give us a call Monday to Friday at (416) 862-03252. ~CL
April 14th, 2021 – Natural Gas Market Update | Hello folks and welcome back to RiteRate’s mid-week natural gas market update. Despite starting the day on a strong note, futures prices for natural gas settled close to unchanged, dropping just one tenth of a cent lower to $2.618. Prices have been finding support in recent days from forecasts of higher weather-driven demand from cooler than normal temperatures for the next two weeks. Declining production levels have added another bullish catalyst into the mix with volumes coming in over 1.5 bcf/day off their peak observed earlier this year. For tomorrow, traders look to the Energy Information Administration’s weekly natural gas storage inventory report to glean insight into the supply and demand balance for the previous week. [EG]
April 13th, 2021 – Natural Gas Market Update | Happy Tuesday everyone! After the price jump upwards early in the day yesterday, the May prompt month natural gas NYMEX futures contract traded relatively flat overnight. After hitting a low at US$2.529/MMBtu before 8AM today, the contract climbed slightly over ten cents to hit a high of US$2.638/MMBtu. Prices have since stabled within this range, and trades slightly above US$2.60/MMBtu at the time of writing. With production continuing to decline due to maintenance at production sites and weather coming in higher than expectations, it appears that prices could be making an early recovery to the high side. Fear not! As prices climb, you could lock in your natural gas rate for up to the next five years. Make sure to visit our website for more details under Home or Business, or give us a call anytime at (416) 862-0322. Make sure to tune back in tomorrow for more natural gas market updates. ~CL
April 12th, 2021 – Natural Gas Market Update | Happy Monday everyone. Since the market opened at 6PM yesterday, the prompt month May NYMEX natural gas contract saw a ten cent spike upwards hitting a high of US$2.605/MMBtu. As more traders began their days however, pricing fell to a low of US$2.53/MMBtu for the day before ultimately settling at US$0.035/MMBtu higher than Friday. As we have mentioned in previous posts, declining production with colder than expected temperatures in April have led to prices shifting around quite a bit. Prices continue to trade at a relative low point, so now could be a great time to lock in your natural gas prices with a RiteRate fixed rate contract! For your preferred term, we are able to offer one steady commodity rate. Make sure to visit our Home or Business tabs to learn more and find the perfect plan for you. ~CL
April 9th, 2021 – Natural Gas Market Update | Good afternoon everyone. Natural gas futures traded in a modest range on Friday before settling nearly unchanged from Thursday’s settlement. Bearish selling momentum from recent weeks has slowed as production has gradually declined since the start of April. In conjunction with this, weather forecasts have added degree-day demand for the 2nd and 3rd weeks of April. From what we have observed, it seems that a broad base of support has been built in the $2.45-2.50 level. Supply and demand balances would need to significantly loosen in order for there to be any renewed interest in selling in this region. [EG]
April 8th, 2021 – Natural Gas Market Update | Happy Thursday everyone! Today marked a relatively quiet trading day with the prompt month May NYMEX contract trading within a six cent range, settling relatively unchanged from yesterday. The Energy Information Administration (EIA) weekly natural gas storage report was released at 10:30AM today. Industry analysts had estimated a injection range of 11 to 30 billion cubic feet (Bcf), averaging at 22.8 Bcf. The actual number came in close at 20 Bcf leading to a slight upward movement in prices following, quite different from the oftentimes significant price shift in previous weeks. Early estimates are looking at an injection of around 60 Bcf next week factoring in the Easter long weekend and warmer weather. Make sure to tune-in tomorrow to see how natural gas wraps up the week! ~CL
April 6th, 2021 – Natural Gas Market Update | Happy Tuesday! Yesterday’s downwards momentum resumed after a slight recovery overnight in today’s trading session. The May prompt month contract fell from a high of US$2.57/MMBtu to settle under US$2.50/MMBtu today. Temperatures have adjusted warmer since forecasts run prior to the Easter Holiday weekend, but cold below normal could emerge from April 13th to 20th. As we continue in the shoulder month remains relatively soft with steady production levels continuing. ~ CL
April 5th, 2021 – Natural Gas Market Update | Good afternoon everyone. Thanks for tuning in to another update from the team at RiteRate. Futures prices for natural gas sold off in today’s session, with the May contract falling down from $2.639 to $2.511, a 4.8% depreciation. Weather models over the weekend were materially warmer than last week’s runs, indicating that temperatures will remain at above normal temperatures for the second week of April. To the downside, traders look towards the $2.45 level as an area of interest as significant historical support is found at this level. [EG]
April 1st, 2021 – Natural Gas Market Update | Happy end of the week everyone! The May prompt month contract traded between US$2.578 and US$2.663/MMBtu today, a similar range to the previous few trading sessions. The day started off rather low, but was pushed upwards following the weekly release of the U.S. Energy Information Administration storage report. Industry analyst estimates came in at an injection (+) of 21 billion cubic feet (Bcf), with a range between 11 to 41 Bcf. The actual injection amount came in on the lower end at 14 Bcf. The market responded accordingly, rallying upwards to the high. Important to note: A revision of 4 Bcf was added to last week’s release, so we see an early end of withdrawal season balance of 1,750 Bcf in storage. The RiteRate team wishes everyone a safe and restful Easter long weekend! ~CL
March 31st, 2021 – Natural Gas Market Update | Natural gas prices settled modestly lower Wednesday afternoon as weather forecasts call for milder temperatures during the latter half of April. All eyes are on tomorrow’s EIA storage report that is expected to show the first inventory build of the season, indicating the shift from net withdrawals to injections into storage. Market participants’ estimations range from +13 to +41 for tomorrow’s report, with a survey average of 23 bcf according to a poll from Reuters. The anticipated build is representative of the looser balance observed over the past week as warmer than normal temperatures throughout the country during the second half of March have limited the heating demand for natural gas. We expect that prices will move sideways to lower unless a bullish catalyst can tighten balances as we head into the shoulder season. [EG]
March 30th, 2021 – Natural Gas Market Update | Happy Tuesday everyone! Today marked the first day of trading with the May contract as the prompt. Following yesterday’s bullish momentum, prices traded between US$2.66 and US$2.69/MMBtu overnight. During normal trading hours today, prices traced back to late last week levels, just above US$2.60/MMBtu. Temperatures in the near-term remain relatively unchanged in most recent model runs, with further out days also showing milder adjustments. Demand has also weakened across the board, particularly in power burn demand as wind generation has increased. We are entering a period of relative price stability in the natural gas contract, so not much volatility is expected for the time being. Make sure to tune-in tomorrow to see what natural gas does next! ~CL
March 29th, 2021 – Natural Gas Market Update | Today was the last day of trading for the April 2021 natural gas futures contract. Prices appreciated 1.1% to settle at $2.586/MMBtu, with the rest of the forward curve following suit. With this contract rolling off the board, May becomes the focus for traders in the short-term. While we will see a quick period of cold throughout the country early this week, weather model forecasts are calling for milder temperatures to return in the 6 to 15 day time frame. While this weather-driven demand weakness will weigh on prices through the month of April, it is counterbalanced by the year over year demand growth in LNG exports, which have been holding steady at 11 bcf/day or more. Last week, the market found a floor around the $2.50 level after a stronger than anticipated storage report indicated tighter balances. It remains to be seen whether this area of historical report will be tested again, or if prices will bottom out and move higher as we proceed into the later part of spring. [EG]
March 26th, 2021 – Natural Gas Market Update | Happy Friday, the last one of March already here! After bullish moment swept up the market following yesterday’s EIA storage report, prices continued to trade between US$2.54 and US$2.58/MMBtu. As per usual, trading will close at 5PM ET today and re-open at 6PM ET Sunday, March 28th. Next Monday, March 29th will mark the last day of trading for the April natural gas contract, so there is still room for price movement as traders look to close out their existing positions. For the time being and the month of April, natural gas prices are expected to stay rather soft, but higher prices are expected to return as summer begins. Potential decreases in natural gas production paired with COVID-19 recovery could lead to an under supply in the market, a main catalyst for increased bullish momentum. Capitalize on the low prices now by signing a fixed-rate contract with RiteRate! We will ensure that you pay one steady rate throughout the entire duration of a term of your choice so you never have to think about rising markets. Make sure to visit our website or give us a call at (416) 862-0322 to learn more. ~CL
March 25th, 2021 – Natural Gas Market Update | Good afternoon everyone. Thanks for tuning in to another market update post from the RiteRate team. If you’ve been checking out our posts regularly, you’ll know that on Thursdays at 10:30am EST, the Energy Information Administration releases its storage inventory report. This report details the amount of gas that has been pulled out of or injected into storage for the previous week. Analysts’ expectations for this week’s EIA storage number ranged from a withdrawal of 10 bcf (billion cubic feet) to a withdrawal of 30 bcf for the week ending March 19th, 2021. Market prices jumped upon the release of the number, as 36 bcf of natural gas was reported to have been withdrawn, indicating that supply and demand balances were tighter than what was projected from production and consumption estimates. Feel free to reach out to us if you’d like to learn more about how RiteRate utilizes storage in southwestern Ontario to deliver affordable and competitively priced natural gas to its residential and commercial customers throughout the province. For more information on natural gas storage, check out this Wikipedia article for a deeper dive into the specific details. [EG]
March 24th, 2021 – Natural Gas Market Update | Happy Wednesday everyone! Today saw another relatively steady trading day in the April NYMEX contract. Prices were bounded by US$2.503 and US$2.545/MMBtu, and settled at US$2.518/MMBtu, one cent up from yesterday. At the time of writing, the contract continues to trade slightly under US$2.52/MMBtu. Taking a look at fundamental factors, cold has lessened for the end of March, but demand has been added slightly for the first few days of April. Supply is holding relatively stable and residential/commercial demand continues to fall off as the weather warms, the normal as we transition into April. Tomorrow will mark the weekly release of the Energy Administration Information (EIA) storage report. An early estimate of a 21 billion cubic feet withdrawal has been projected by some analysts. This week’s release will probably be the last withdrawal week for now, as we turn to storage injections soon. Make sure to tune back-in tomorrow to read about the actual storage report release and to stay up to date with the world of natural gas. ~CL
March 23rd, 2021 – Natural Gas Market Update | Good afternoon everyone. Let’s take a look at price action in the April 2021 natural gas contract. The prompt month contract for natural gas finished 2.9% lower after settling just above the $2.50 US/MM level, down from $2.582 yesterday. Prices continue to be pinned down by bearish weather forecasts indicating warmer-than-normal temperatures into the first week of April; however, we are seeing a strong base of support formed around the $2.50 region.
March 22nd, 2021 – Natural Gas Market Update | Happy Monday everyone! Another exciting day in the natural gas market to kick-off the week. The April prompt month NYMEX natural gas contract started off the normal trading day at a low of US$2.478/MMBtu before rallying and settling at US$2.582/MMBtu, US$0.047/MMBtu higher than last Friday’s settle. Overall, not much has changed. The most recent Global Forecast System (GFS) Ensemble model run did see a milder adjustment for the next week, with the previously estimated cold spike pushed to March 31st to April 1st. Residential and commercial demand is on the decline as transition from winter to spring, so prices are expected to trade near to below levels seen today. The natural gas market is always changing and evolving so make sure to tune back in tomorrow to get the latest with RiteRate! ~CL
March 19th, 2021 – Natural Gas Market Update | After closing in the red for many consecutive sessions over the past two weeks, natural gas prices finished $0.054 higher on Friday despite a weak outlook for weather-driven demand. Prices have consolidated around the $2.45 to $2.55 region as small additions to weather demand in the 14-day forecast prompted traders to cover short positions heading into the weekend. Should April continue to see above normal temperatures for this time of year, prices may test support levels in the low $2.40s if there are no additional bullish fundamentals besides recovering industrial demand and LNG export strength to offset weather-driven demand weakness. [EG]
March 17th, 2021 – Natural Gas Market Update | Happy Wednesday and St. Patrick’s to those celebrating! As we look to round out the last month of the Winter strip, not much activity is seen these days. As you may recall from our updates the previous week, the April NYMEX prompt month natural gas contract has been on the decline for the past few days but have since hit a bottom and stabilized. A range of US$2.48 to US$2.55/MMBtu was seen today, relatively unchanged from where prices sat at yesterday. Weather models continue to show a cold spike tomorrow and Friday, followed by another shot the 28th to 29th. Supply and demand figures remain similar to previous day levels as well. Some shifts may be expected tomorrow as the U.S. Energy Information Administration looks to release their weekly storage report for the weak ending March 12th, 2021. With the past two weeks actuals coming significantly lower than the estimated withdrawal amount, this week we are seeing quite a smaller withdrawal estimate at only 12 billion cubic feet (Bcf) from some analysts. This would be 3 Bcf less than what was recorded last year, and 43 Bcf below the five-year average. Make sure to tune back-in tomorrow to see if we are surprised three weeks in a row! ~CL
March 16th, 2021 – Natural Gas Market Update | Happy Tuesday! Since hitting a bottom yesterday, the April prompt month contract made a slight rebound during today’s trading session, settling at US$2.562/MMBtu. The most recent weather run saw minimal change in the upcoming days but did see a shift of potential colder weather to later on in the month. Supply and demand balances are slightly tighter, but relatively unchanged as well. The April NYMEX natural gas contract will continue to trade as the prompt month contract up until March 29th, 2021, so we will expect to see some increased fluctuations as financial traders enter and exit the market. As we continue to trade at these relatively low prices, consider signing a fixed-rate contract with RiteRate. For your preferred term, pay one steady rate for your natural gas consumption, without having to worry about what markets are doing. Give us a call at 416-862-0322 or reach us through our Contact Us! ~CL
March 15th, 2021 – Natural Gas Market Update | Good afternoon everyone. Welcome back to another market update from the RiteRate team. Taking a look at price action today, natural gas continued its decline after last week’s selloff. The prompt month contract fell by about 4% after breaking through support levels found in the $2.55-$2.60 region. Since Friday, day over day weather forecasts have shifted warmer for the next 14 days, indicating weaker demand for natural gas than is typically observed for this time of year. Weaker demand results in smaller withdrawals from storage and stout inventory levels. Higher storage inventory levels weigh on prices as there is more` supply to draw from in future months. If you are considering a fixed-rate contract through RiteRate, you may be wondering what to make of all this. We have good news for you! Lower prices allow customers to sign up at even more affordable rates as it becomes cheaper to buy natural gas supply for a multi-year period. If you have any questions or would like to learn more, don’t hesitate to give us a call. We would be happy to chat with you. [EG]
March 12th, 2021 – Natural Gas Market Update | Happy Friday everyone, yet another week done in 2021! The April prompt month natural gas contract started the day off today relatively unchanged from yesterday, trading within the US$2.65 to US$2.67/MMBtu range. After meeting resistance at US$2.65/MMBtu and bouncing off, prices hit a steady decline slightly before 1PM, falling slightly below US$2.60/MMBtu before recovering slightly. The April contract ultimately settled at US$2.60/MMBtu, US$0.068/MMBtu down from yesterday. The price decline is attributable to weather model run revisions. The previously forecasted cold spikes around the 19th and 20th, as well as the end of March have weakened, decreasing the projected heating and cooling degree day demand. With all of these changes in mind and an environment where prices are currently relatively low and stable, consider taking advantage of Canadian RiteRate’s fixed rate natural gas contract! For your preferred term, you will be able to pay one steady rate, locked-in at the beginning. Make sure to Contact Us through our website or give us a call at 1-877-866-8056. Have a great weekend ~CL
March 11th, 2021 – Natural Gas Market Update | Happy Thursday everyone! Today marked yet another fairly bumpy day in natural gas. The April prompt month natural gas contract started the trading today at a low in the US$2.66/MMBtu levels and continued to fluctuate with two cents above that until the 10:30AM Energy Information Administration (EIA) weekly report. Recall that last week, while the industry average came in at a withdrawal (-) 138 billion cubic feet (Bcf), the actual report came in at -98 Bcf. This week, the early industry analyst survey saw an average of -67 Bcf, with a range from -104 Bcf to -39 Bcf. As a quick reminder, during the winter strip of natural gas trading, storage withdrawals are typically recorded to meet the increase in demand. The larger the withdrawal, the more bullish on prices, (that is to say “expect higher prices moving forwards”), and vice versa. The actual report for the week came in at -52 Bcf. Given that this was more bearish (“expect lower prices moving forwards”), market prices did react and sell-off, but quickly recovered to hit a high of just under US$2.70/MMBtu. Prices were not sustained at those levels however, and the contract settled at 2:30PM at US$2.668/MMBtu. Only a couple of weeks are left for the storage withdrawal season as April given normal weather will turn to injections. Speaking of weather, March is still looking relatively uneventful. Some colder days look to be expected around the 15th and 19th to 20th time frames, but otherwise only small revisions have been seen in the past few model runs. As we know it though, everything is constantly changing, so make sure to tune back in tomorrow for RiteRate’s Natural Gas Market Update to see how we round up the week! ~CL
March 10th, 2021 – Natural Gas Market Update | Good afternoon everyone! Welcome back to RiteRate’s Wednesday market update. Taking a look at price action within the natural gas market today, we saw green on our screens with contracts settling up about 1% near the highs of the day. With the peak of heating demand in the rear-view mirror, there has been downward momentum in the market for the past few sessions, but traders look toward a period of below-normal temperatures natural during mid-March that will drive consumption up moderately. Additionally, the market is positioning itself in advance of tomorrow’s EIA storage report where analysts expect a withdrawal in the range of 60-80 bcf for the week ending March 5th, 2021. Recall that last week, the EIA print was a massive bearish miss: a 98 bcf withdrawal was report when the market had expectations for a pull of 130-150 bcf. Might we see a revision in last week’s data? If recent history has shown us, anything is possible! Tune in to our update tomorrow afternoon for more coverage on what is moving the market. [EG]
March 9th, 2021 – Natural Gas Market Update | Happy Tuesday everyone! The April prompt month natural gas contract did some further jumping around today. After hitting a low of US$2.624/MMBtu early in the morning, prices climbed successively throughout the day. Shortly before the close, the contract jumped US$0.04/MMBtu to US$2.69/MMBtu before settling ultimately at US$2.662/MMBtu. All-in-all, weather models continue to shift around, with additional degree days added in the most recent weather runs. Production is also back down to March 3rd levels, but overall demand has also weakened with the welcoming of warmer temperatures. ~CL
March 8th, 2021 – Natural Gas Market Update | Welcome back to another installment of RiteRate’s natural gas market updates. The downtrend in natural gas prices has continued as we move into the shoulder season between winter and summer, a period of easing heating demand. At the current moment, there has not been a great amount of changes in the fundamental factors affecting the supply and demand balance. Production and export levels have remained steady, but as heating demand has lessened week over week, the gradual downward momentum has driven prices lower. Analysts note that stronger withdrawals from storage will be needed going forward to support prices, however, balmy conditions across the majority of the United States and Canada will make that scenario less likely. We should keep in mind, however, that winter cannot be counted out, as evidenced by the massive influx of cold temperatures mid-February which manifested after a mild December and January. [EG]
March 5th, 2021 – Natural Gas Market Update | Happy Friday everyone! Natural gas prices continued its downward trend today with the April prompt month NYMEX natural gas contract settling US$0.045/MMBtu lower than yesterday. Winter Storm Uri continues to bring back in production output and the most recent weather model run showed a pretty large revision: warmer weather expected until March 15th, before a cold swell up to the 18th, and a return to warmth again. The downward pricing pressure can also be thought of as an extension to the bearish news released in yesterday’s Energy Information Administration (EIA) lower-48 storage report. While the industry consensus estimate painted a withdrawal of 138 billion cubic feet (Bcf), the actual withdrawal only hit 98 Bcf. This number will reduce the size of the storage deficit from previously projected low numbers, but there still is a couple of weeks until we transition into the summer spread of natural gas (April to October). Hope everyone has a safe, warm, and relaxing weekend, see you next week! ~CL
March 3rd, 2021 – Natural Gas Market Update | Happy middle of the week everyone! The April NYMEX contract settled US$0.023/MMBtu lower today after hitting a relative high of US$2.887/MMBtu. The supply and demand balance has loosened since yesterday in the lower-48, with production increasing and demand decreasing primarily in the Residential and Commercial usage figures. Weather model revisions have also cut back on both the number of heating degree and cooling degree days in the upcoming days. For the time being, the April contract continues to trade above the US$2.80/MMBtu range, far off from the low point under US$2.70/MMBtu last Friday, February 26th, 2021. ~CL
March 1st, 2021 – Natural Gas Market Update | Happy Monday yet again everyone, astonishing to see that it’s already March today! The April contract continues to trade as the prompt month NYMEX contract, and bumped around quite a bit today. The contract hit a low price of US$2.72/MMBtu early on in the trading session before hitting US$2.78/MMBtu right before the close. April ultimately settled at US$2.777/MMBtu, nearly identical to last Friday’s settle. While prices may remain stable for the time being, you never know what may happen next! A bit of cold weather is still a possibility coming up, which could lead to some price spikes. In the meantime, remove the uncertainty from your personal natural gas plans by considering a fixed-rate natural gas contract with Canadian RiteRate. For your term of choice, we are able to lock in your rate from start to finish. Give us a call at 416-862-0322 or email us at [email protected] to learn more! ~CL
February 25th, 2021 – Natural Gas Market Update | Happy Thursday everyone! A couple of key points for today, strange that we’re already at the last Thursday of February. Today marked the first day of the April NYMEX Natural Gas futures contract as the prompt month contract. Prices had rallied overnight from yesterday’s close, but began a downward trend at around 8AM as North American markets resumed daily activity. As per usual, today also marked the Energy Information Administration’s (EIA) weekly storage report. Recall that there is a one week lag in the report, so today’s number covers the actions of the week ending February 19th (which was quite the week, i.e., Texas freeze-offs, super cold weather among the likes). Industry analyst estimates came in at an average withdrawal of 337 billion cubic feet (Bcf), with a range spanning from -287 to -371 Bcf (“-” implies a withdrawal). The actual report released at 10:30AM however, was slightly bullish at only -338 Bcf. The news was ultimately unable to reverse the downward pressure, with the April contract settling at US$2.777/MMBtu, down $0.018 from yesterday. ~CL
February 24th, 2021 – Natural Gas Market Update | Good afternoon folks. Welcome back to our mid-week market update. Today marked one of the least eventful settlement days we’ve seen in recent months as the March 2021 contract rolled off the board, settling down $0.025 to $2.854 at the end of the day’s trading session. Normally volatility is the name of the game on contract expiration day, however, prices for the prompt month traded within a $0.064 range. The downward momentum of this week has continued as weather models continue to show warmer day over day shifts in their 14-day forecasts. Tomorrow traders will look to the Energy Information Administration’s weekly storage report for the week ending February 19th, 2021. This report will shed some insight into the supply and demand balance of natural gas through the severe winter storm that disrupted energy markets throughout the mid-continental United States. Expectations for the number range from a withdrawal of 291 to 365 bcf. If you’re curious to find out the result, be sure to check back here tomorrow afternoon for our coverage, or head to the EIA’s website at 10:30am EST to check the number directly. [EG]
February 23rd, 2021 – Natural Gas Market Update | Happy Tuesday everyone! The March prompt month NYMEX natural gas futures contract continued to fall in prices today as we embrace warmer weather! Additionally, production continues to return and demand is slightly down, easing on the tight balances seen a week ago. Tomorrow will be the last day of trading for the March contract, before we roll into April as the prompt month. Recall that for the past couple of months, we saw price rallies into the final settlement. The March contract in contrast to February however, has been settling lower each day for the past couple of days. Make sure you tune back in tomorrow to see how trader sentiment plays out! ~CL
February 22nd, 2021 – Natural Gas Market Update | Good afternoon everyone. Hope you all have been safe and warm indoors on cold wintery days like today. Taking a look at price action in the natural gas market today, we saw the March 2021 contract continuing its decline from the highs from last week as temperatures in the 14-day weather forecasts from over the weekend shifter warmer than normal. Adding to the loosening supply and demand balance is the recovery of production in the Permian basin from last week’s unprecedented winter storm that left power and gas markets in disarray. By the end of the session, March settled down $0.116 at $2.953, however, traders look towards the Energy Information Administration’s storage report on Thursday wherein the record for the largest ever recorded pull from national storage inventories could be in the works. We will be sure to provide coverage as the week progresses. [EG]
February 19th, 2021 – Natural Gas Market Update | Happy Friday everyone! Yesterday’s downward pressure on prices continued today. After falling under US$3.00/MMBtu yesterday evening, prices traded within a US$0.10 range throughout the day, hitting a high of US$3.14/MMBtu. Weather has shifted slightly colder in the forecast looking out, but nothing out of the ordinary is currently expected for the month of March. Recovery from the freeze-offs that occurred in earlier this week in the U.S. is ongoing, and is expected to be somewhat of a lengthy process. The NYMEX March prompt month contract’s last day of trading is next Wednesday, February 24th, 2021 so we will most likely see some increased volatility. Make sure to tune back-into Canadian RiteRate’s daily market updates next week as well! ~CL
February 18th, 2021 – Natural Gas Market Update | Good afternoon to all of our readers out there. Welcome back to another natural gas market update. Today’s price action seemed to reflect the inverse of yesterday’s session, as prices started higher in the overnight session before crashing down $0.20 off the highs off the morning heading into the 10:30AM release of the Energy Information Administration’s weekly storage inventory report. Expectations for last week’s withdrawal from storage ranged between 250-260 bcf, however, the report came in well below these levels at 237 billion cubic feet. With inventories being larger than the market expected, the price for the March 2021 futures contract settled down $0.137 from yesterday’s close.
February 17th, 2021 – Natural Gas Market Update | Good afternoon folks and welcome back to another market update from the RiteRate team. Natural gas futures prices for the prompt month (March 2021) started the day lower than yesterday’s close but had surged upwards as much as $0.25/MMBtu off the low of the day before closing up $0.09 at $3.219. No shortage of volatility in this market! Driving the price action is the unprecedented amount of weather-related demand throughout the mid-continental United States and associated production losses in oil and gas producing states such as Texas. We have seen estimates of as much as 20 billion cubic feet of natural gas production being taken offline due to freeze-offs, a phenomenon that is discussed more in depth in this RBN energy blogpost. It remains to be seen how long this production will remain offline, but it certainly have bullish implications for storage inventories as we proceed into the summer and fall.For more coverage of this developing situation, be sure to check out our post tomorrow afternoon as we provide updates on these extraordinary circumstances. [EG]
February 16th, 2021 – Natural Gas Market Update | Happy Tuesday everyone! Hope the Family Day long weekend was restful. The snow this morning was quite a surprise to wake up to. Good news though, is that the cold appears to finally be coming to an end! For those excited for Spring, it should be getting significantly warmer by the end of the week. In the meantime however, natural gas prices are still trading and hitting new highs. The market climbed over US$0.14 this morning to the US$3.21 level for the March prompt month contract, before coming down slightly. Today ultimately settled US$0.217 than Friday (remembering that yesterday was a holiday) at US$3.129/MMBtu. A lot of the upward pressure in the futures contract pricing can be attributable to high cash prices. As the weather becomes severely cold, the demand for next day gas increases, driving up the price as supply dwindles. The cash price for the long weekend on Friday settled at US$5.6552/MMBtu at the Dawn hub, with even higher prices elsewhere throughout the U.S. ~CL
February 11th, 2021 – Natural Gas Market Update | Happy Friday Jr. everyone! Today was another busy day in the market. After climbing into the 2:30PM close, the prompt month March contract continued to climb overnight and into this morning. The contract ultimately peaked at US$3.05/MMBtu before downward pressure was applied. Today also marked another U.S. Energy Information Administration storage report release, and this only served to drive prices lower. The analyst consensus estimate sat at an average of -181 Bcf (the negative indicates a withdrawal from storage!), with multiple players sitting slightly above that. The actual report came in at -171 Bcf though, a whole 10 Bcf lower, bringing about extremely bearish sentiment. Settlement ended up at US$2.868/MMBtu today, over four cents down from yesterday, even though the start of the day painted a very different picture. ~CL
February 10th, 2021 – Natural Gas Market Update | The wild, volatile price action seen in the natural gas futures market continued today with March (NGH2021) trading within a 24 cent range. Prices traded as low as $2.74 during the early morning hours before rocketing upwards to settle at $2.911 in the afternoon. The upward momentum has continued after the settlement time with prices trading in the mid $2.90s, fueled by strong cash prices observed throughout the U.S. and Canada as colder than normal temperatures ramp up heating demand. The peak of the polar vortex cold will be settling in early next week, bringing with it not only sustained natural gas demand, but also the potential for freeze-offs in production. Both of these may bring further upside to prices in the near term before natural gas demand eases into the latter part of March and into April. Tomorrow, traders look to the Energy Intelligence Agency’s weekly natural gas report, in which expectations are for a 181 bcf withdrawal. Meet us back here then for another natural gas market update from the RiteRate team. [EG]
February 9th, 2021 – Natural Gas Market Update | Happy Tuesday everyone! The March prompt month natural gas contract continued to trend downwards today. Prices traded down to US$2.788 a couple of times today, before climbing up and settling at 2:30PM at US$2.835. At the time of writing, prices have backed off a bit yet again, sitting at around US$2.80. It appears that the price decline is attributable to revisions in the weather forecasts hinting at less intense cold weather. In other news, the U.S. Energy Information Administration (EIA) released their monthly Short Term Energy Outlook today (STEO). To note, they’re forecasting increasing prices and decreasing production moving forwards, but there’s still a lot of moving parts that could bring some significant changes. Make sure to tune in tomorrow as well to read about what’s going on in natural gas! ~CL
February 8th, 2021 – Natural Gas Market Update | Welcome back folks! We’ve got another market update from the RiteRate team to share with you today. Natural gas futures prices for the March contract reached just short of the $3.00/MMBtu level before meeting resistance. The price ultimately settled up just $0.019 from Friday’s close at $2.882, indicating that bullish momentum to the upside has been slowed amid more moderate weather forecasts toward the end of February. It appears that the substantial amount of cold weather driven natural gas demand has been priced in to the market, and futures traders are now focusing on what comes next. In the near future however, we will see some of the coldest national temperatures on record, so be sure to layer up to shield yourself from the coming frigid arctic air. [EG]
February 5th, 2021 – Natural Gas Market Update | Happy Friday everyone! Today’s trading session saw another number of up and downs. Yesterday’s price climb continued further up overnight and into this morning. Prices rose to the US$3.06 levels a couple of times, but ultimately faced resistance. Starting around 9:30AM, the March prompt month contract began coming down, settling at US$2.863 for the day. At the time of writing, prices have made a slight recovery, hovering just under the US$2.88 level. Looking back at the last two weeks, a similar pattern was seen where Friday trading saw a decline in prices. With the market being closed on Saturday, the Sunday 6PM open saw a huge gap upwards. It’s still up in the air whether we’ll see that again this coming Sunday, but the action today seems like a pretty promising start to another repeat. Have a great weekend everyone, and make sure to tune in Monday to see if we can similar courses of action three weeks in a row! ~CL
February 4th, 2021 – Natural Gas Market Update | Good afternoon folks. Today’s trading session was a rollercoaster ride from start to finish. Prices for the March contract came under pressure overnight, hitting lows under $2.75 before finding support from the 6am weather forecast calling for additional heating demand in the 14 day forecast. The EIA released their weekly storage inventory report dead on expectations of a 192 billion cubic feet withdrawal from storage facilities. Price action suggested that the market was fearing a print in the mid to low 180s. Following the report, each successive weather model run added to forecasts for cold temperatures throughout the United States and Canada for the middle of February. The ECMWF ensemble added a whopping 30 gas weighted degree days to the forecast, a magnitude that is rarely seen between one run to the next. That was enough to send prices soaring into the close of the day, with the March contract settling up +$0.146 at $2.935. What remains to be seen is to what extent this cold weather sticks around into the end of February and beginning of March, and how much these freezing temperatures could interfere with natural gas production. [EG]
February 3rd, 2021 – Natural Gas Market Update | The price of the March prompt month natural gas contract continued to fall today even as weather models continued to forecast cold weather. The overall number of GWDDs has gone up, although the intensity of cold has made a shift closer to the end of next week as opposed to the beginning. It appears that there is some irrationality in the market, although the exact reasons why are still unknown. Prices will most like continue to trade at the US$2.70/MMBtu level, quite the ways off from the low of US$2.26/MMBtu seen at the end of December. Tomorrow marks another U.S. EIA storage report day. Last Thursday we saw a pretty steep drop after the release that the actual withdrawal was less than expected (reminder that this is bearish, also know as weak for prices because there’s now additional supply). Prices did rebound throughout the day though. An early outlook last Friday sits at a market consensus average withdrawal of 192.50 Bcf. Make sure to tune back in to our daily market updates to find out what the actual number is tomorrow and what impacts it has on natural gas pricing. ~CL
February 2nd, 2021 – Natural Gas Market Update | Good afternoon folks! Welcome back to another natural gas market update brought to you by the RiteRate team. After weather models shifted significantly colder, adding to demand additions from over the weekend, the market responded by rallying the prompt month contract to the $3.00/MMBtu level. Despite the bullish developments in the 15-day forecast, sellers stepped in at this level and capitalized on the opportunity to enter into new shorts, bringing the settlement price just under yesterday’s close when all was said and done. It is worth mentioning that market participants have seen cold weather forecasts fail to materialize many times this winter, but we expect that prices will find support in the coming weeks as frigid temperatures across the midwestern and northeastern states draw down storage inventory levels at rates that far exceeds the 5 year average. Traders will look for confirmation of weather forecasts in successive runs before entering into new positions in the market. [EG]
February 1st, 2021 – Natural Gas Market Update | Welcome to the second month of 2021 already, how time flies! The March contract made huge moves today, largely due to colder revisions in weather forecasts that started over the weekend. Yesterday’s market open at 6PM saw the second gap up in a row following a similar move last week. A gap refers to a large jump up or down when the market opens in comparison to the previous session’s closing price. Gaps are typically seen following the weekend down time or after holidays with low trading activity. Colder weather continues to be projected in the near future. Today’s midday weather Global Ensemble Forecast System (GEFS) run added 50 gas-weighted degree days (GWDD) in a 12-hour period, the largest such change recalled in an ensemble run! A cold first half of February is now expected, but we’ll have to wait and see how reality plays out. The prompt month contract ultimately settled at US$2.85 today, and we could see a move to US$2.90 if another colder revision is made. ~CL
January 29th, 2021 – Natural Gas Market Update | Natural gas futures finished in the red today after warmer weather changes in the 15 day forecast manifested overnight, dropping the price of the March contract $0.10 to $2.564. This pattern feels all too familiar to natural gas traders as there has been a trend this winter for cold weather forecasts to shift warmer as the 11-15 day time period moves to the 6-10 day. Will we see a gap downwards in pricing when markets open on Sunday at 6pm EST, or will models continue to display below-normal temperatures as model begin to project into mid-February? Our view is that the selling may be overdone given the minimal changes to GWDD forecasts which indicate levels of above-normal demand. [EG]
January 28th, 2021 – Natural Gas Market Update | Happy Thursday everyone! Today marked the rollover of the prompt month contract to March. The U.S. Energy Information Administration (EIA) weekly storage report was released at 10:30AM today. While the industry consensus estimate was a withdrawal of around 138 billion cubic feet (Bcf), the actual number came in 10Bcf higher at a withdrawal of 128Bcf. In previous weeks we had noted the minimal effect of the storage report as the number often serves to confirm weather related impacts. Today the release led to a $0.06 sell-off before prices recovered, as the number was still somewhat alignment with the warmer temperatures last week. The March contract ultimately settled US$0.038 down from yesterday, but is still trading at the US$2.70 level. Although we see some pretty big up and down movements periodically, natural gas prices are still trending upwards. Take advantage of the relatively low prices by locking in a fixed-rate natural gas contract with RiteRate! We’re here to make sure you have a natural gas plan that works best for your household or business. Make sure to reach out to us through our site or give us a call at 1(877) 866-8056. ~CL
January 27th, 2021 – Natural Gas Market Update | Another exciting day for natural gas markets as the February contract rallied into the close to settle at $2.760. Strength in the 2021 contracts has been observed since weather forecasts have shifted colder, adding projections for demand every day since last Friday. Not only does this affect the near month contract, it also supports later-dated contracts as projections for storage inventory levels are shifted lower due to larger withdrawals from storage facilities across the nation. For tomorrow, traders look forward to the EIA storage inventory reports for clarity into how much natural gas was withdrawn for the previous week. The governmental agency is expected to release a number in the mid 130s, and traders will look to see how their models fared against the official release. A number greater or less than expectations will have implications for price action as it is reflective the supply and demand balance of the gas market as a whole. Stayed tuned for our update tomorrow for the results. [EG]
January 26th, 2021 – Natural Gas Market Update | Happy Tuesday everybody! Natural prices continued to climb today, peaking at around US$2.68/MMBtu before backing off slightly into the settle. Colder changes in the weather models continue to fuel bullish sentiment for the time being. Additionally, the February prompt month contract expires tomorrow, another factor leading to pretty high volatility. If the trend continues, we saw rallies into expiration for the December and January contract, so prices could potentially hit a high in the US$2.70/MMBtu to US$2.75.MMBtu range. As prices look to make a comeback, keep your own natural gas rates low by entering a Fixed-Rate contract with us! With no hidden costs and no price hikes, you’ll be able to hold one steady rate for the duration of your term while the market bumps up and down. Give us a call or send an email through our Contact Us link for further inquiries. ~CL
January 25th, 2021 – Natural Gas Market Update | Hello and welcome back to RiteRate’s Natural Gas Market Update for Monday January 25th. During today’s trading session, the price for the front month natural gas futures contract, February NGG2021, settled 7% higher on the day after a weekend gap upwards. This represents a significant momentum shift attributable to colder temperatures forecasted by the European Centre for Medium-Range Weather Forecasts model in the 14 day forecast. As shown in the image below, there is quite the divergence between the two models, with the ECMWF adding many more gas-weighted degree days, a measurement for natural gas demand, than the Global Forecasting System model. It will be interesting to see if the colder European model’s forecast holds or if the models converge in the coming runs. One thing we can say for sure is that as we head into the expiration of the February contract on Wednesday, we will likely see volatile price action. [EG]
January 22nd, 2021 – Natural Gas Market Update | Happy Friday everyone! The February prompt month natural gas contract continued to traded under US$2.50/MMBtu today as weather continues to ride a warmer trend. Temperature affects aside, given the U.S. holiday on Monday, the EIA storage report was released today. While the analyst estimate average came in at a withdrawal volume for the week ending January 15th of 180Bcf, the actual report came in at a withdrawal of 187Bcf, slightly bullish. A slight price spike was seen after the 10:30AM release, but as per previous week’s, storage has become more of a confirmation factor as opposed to a changing factor. Any price movements from the new information is short-lived, with no ongoing momentum. The February contract’s last day of trading is next Wednesday, so we’ll probably see increased volatility the next three trading days as we continue to wait for the arrival of winter. ~CL
January 21st, 2021 – Natural Gas Market Update | Futures contracts for natural gas settled several cents lower from yesterday’s close, though up from the lows of the day as the European weather model forecasted a halt to the warming momentum observed over the last week. Traders look towards the EIA storage inventory report set to be released tomorrow at 10:30am EST to provide insight into the supply and demand balance of the commodity over the past week. [EG]
January 20th, 2021 – Natural Gas Market Update | The February prompt month contract continued to fall today, hitting a low of US$2.454/MMBtu before ultimately bouncing back to settle at US$2.539/MMBtu. Weather continues to lean towards warmth, especially out into the longer term, although the possibility of cold isn’t completely impossible. The afternoon ECMWF (European Centre for Medium-Range Weather Forecasts) turned out to show much colder changes, leading to the 6 cent climb into the settle. ~CL
January 19th, 2021 – Natural Gas Market Update | The February prompt month contract continued to sell-off today, settling 19 cents lower than Friday’s close. (Reminder that while trading activity was present, low volumes were transacted due to the U.S. holiday). Warmer weather forecasts continue to put downward pressure on prices as the reality of a cold winter slip further and further away with each additional weather forecast run. There is still potential for some colder weather up in the northeast as concerns over the polar vortex continue, but a lot is still up in the air. Tomorrow will be another interesting day in the natural gas markets, given Joe Biden’s presidential inauguration. Biden has quite a focus on climate reform, which could impact fossil fuel industries significantly. Make sure to tune-in tomorrow to see how things turn out, see you then! ~CL
January 18th, 2021 – Natural Gas Market Update | Last week, natural gas futures closed on a higher note as the market responded to mid-session weather model runs calling for elevated demand levels in key demand areas towards the end of January. You may have seen reports recently regarding the chance for a polar vortex to take hold, potentially sending colder arctic air south towards the United States and Canada. Weather model forecasts from over the weekend seem to indicate that the odds of this polar blast providing a sustained cold spike are diminishing, so rest assured that we may not need to bundle up well into February if warmer temperatures return. [EG]
January 15th, 2021 – Natural Gas Market Update | Happy Friday, we’re officially halfway into the first month of 2021! Weather continues to drive natural gas prices, and a colder revision in the overnight model created lasting momentum into today’s trading. The February prompt month contract hit US$2.80/MMBtu briefly before coming back down. Although the cold has yet to turn up as predicted earlier this month, forecasts are now showing at least a cold early February. With this in mind, prices are said to perhaps hit US$2.90/MMBtu by early next week. Next Monday marks a holiday in the States so trading will be down, but make sure to tune-in still for other news and updates. As prices look to be on the rise, make sure to secure what you’re paying for you’re household and businesses! Ask us about our Fixed Rate and Monthly Variable natural gas pricing plans. ~CL
January 13th, 2021 – Natural Gas Market Update | As quick as colder weather forecasts come, they also went and left. Following the major rally in yesterday’s trading session with highs of US$2.90/MMBtu, warmer side revisions today saw settlement back at US$2.75/MMBtu levels. Where prices go next is still a mystery, especially since tomorrow is another EIA storage report day. In the last week, after the 10:30AM release, we saw some (contradictory) movement from the slightly bearish number, but no long lasting momentum. Make sure to tune-in tomorrow to see whether or not we have a repeat! ~CL
January 11th, 2021 – Natural Gas Market Update | Today marked a wild start to the week. Following last Friday’s settlement at $2.70, warmer weather created ongoing downward momentum over the weekend that lasted until slightly after noon today. The afternoon European Center for Medium-Range Weather Forecasts (ECMWF) weather run was the main catalyst in a sudden price rally. The February prompt month contract ended up settling $0.05 higher as a result and continued to climb, hitting $2.80 before settling around $2.79 at the time of writing. From here, we continue to watch weather as the main driving factor. As mentioned last week, colder days are approaching nearing the end of the week. The next couple of days however could see anything from continued higher prices to a reversal several cents lower depending on what the weather runs show. ~CL
January 8th, 2021 – Natural Gas Market Update | Happy Friday, what a week it has been! Hope everyone had an excellent start to the new year. Overnight selling momentum carried into the morning due to a weather forecast revision, but firm cash prices during the day helped to reverse the downward trend. As a quick reminder, the cash price refers to the price of natural gas in the day market, as opposed to entering a forward-based contract in the past for the current month. In theory, the futures price should be equivalent to the cash price plus some factor that accounts for the cost of carry. As a quick example, cash prices rose today, so the futures price, which is equivalent to the cash price plus the cost of storage/borrowing money/ etc., rose as well. So well weather tends to be the focus in the winter months, there are still other factors at play! Weather as mentioned previously this week, is projecting colder days later on, but the change is expected to be short-lived. At this point, only time will tell, so make sure to continue tuning-in! ~CL
January 7th, 2021 – Natural Gas Market Update | Natural gas prices settled close to unchanged from the previous day after an EIA storage report revealed an inventory withdrawal in-line with market expectations. We note that any shift away from colder weather model runs has the potential to drag prices down lower, therefore bulls will need to see temperatures at near or below normal averages for any price rally to be sustained. [EG]
January 6th, 2021 – Natural Gas Market Update | What a day it has been today. Weather continues to be the leading factor affecting prices. Overnight, weather models had turned to the warmer side, leading to an $0.08 sell-off from yesterday’s settlement of $2.70. Starting at 8AM though, markets saw a reversal up until noon, accounting for an adjustment back to the cold, particularly in the 11 to 15 day period. The prompt month February contract fell again in the afternoon, before making a slight recovery and settling approximately $0.015 higher than yesterday. Tomorrow will mark the first storage report of the year, so make sure to tune-in for the official number and subsequent effects. Cheers! ~CL
January 5th, 2021 – Natural Gas Market Update | Natural gas priced climbed significantly Tuesday on weather forecasts confirming a shift to colder temperatures in the 14 day forecast. With momentum shifting to the upside, prices are testing areas of technical resistance near December highs in the high $2.70s. Natural gas bulls will need weather and teleconnections to cooperate and hold this pattern for prices to move higher, as temperatures near the 10 year average would be supportive to prices with the supply and demand balance tighter year over year. [EG]
January 4th, 2021 – Natural Gas Market Update | Happy New Year everyone, had to triple check to make sure I got the year right up top today! It’s been a while since a blog post, hopefully all of our readers had a safe and restful winter holiday. Since our last post, lots has happened. For one, the prompt month contract has now transitioned to February. The January contract climbed on the last day of trading last Tuesday, December 29th, 2020, closing at US$2.467/MMBtu. The February contract is currently trading at US$2.603/MMBtu at the time of writing. Colder weather had driven a price rally early in the morning, but later came down nine cents due to sellers both in natural gas and global markets applying downwards pressure. On the horizon in terms of weather, there still is the possibility for cold, which could lead to a shift in prices to the higher side. The February contract last trading day is January 27th, 2021, so until then, there’s still ample room for changes. Make sure to stay tuned on the daily for all the latest updates! ~CL
December 23rd, 2020 – Natural Gas Market Update | Happy Wednesday everyone! Today marked a turn around in the market. Given the January prompt month contract expires next Tuesday, we’ve been paying extra attention to changes, and today was no exception. After hitting a new relative high at $2.80 yesterday, the contract held steady overnight, but dropped as volume picked up at 8:30AM. The early EIA storage report this week also added to the downward pressure. Industry experts this week held estimates between a 142Bcf to 179Bcf withdrawal, with an average sitting at a 158Bcf withdrawal. The actual report came out at 12PM, signalling a withdrawal of solely 152Bcf. By the market settle today at 2:30PM, prices had hit $2.565, but have returned and stabilized at the time of writing slightly above $2.60. Quick reminder that natural gas markets will close early at 1:45PM tomorrow, and remain closed until the usual Sunday night open at 6PM EST. Wishing every one a joyful holiday season ~CL
December 22nd, 2020 – Natural Gas Market Update | Good afternoon folks! Welcome back for another market update from the RiteRate team. Looking at price action throughout the day, winter contracts rallied upwards after overnight weather forecasts shifted colder in the 11-15 day period. This raises the demand outlook for natural gas into the start of 2021 and reduces the year-over-year storage deficit by about ~25 billion cubic feet. Looking at non-weather related changes in supply and demand, LNG export levels are reaching back towards the 11 Bcf/day level after briefly dropping down below 10 Bcf/day early last week. There have been some early indications that up to 5 LNG cargos may be cancelled for February 2021. While we saw cargo cancellations earlier in the year due to lack of demand, the cause for these cancellations was connected to a lack of ship availability. We will continue to monitor the situation as it develops. For now though, we wish you and your families a safe and warm holiday season. [EG]
December 21st, 2020 – Natural Gas Market Update | Happy Winter Solstice, officially the shortest day of the year today! The January prompt month natural gas contract is officially in it’s last week of trading. As mentioned previously, nearing the end of the contract’s life, volatility typically increases as traders look to exit their long term positions and turn to day trading. For example, the market saw an $0.08 climb from a low at 6:30AM, but came down $0.05 by 8AM. By the 2:30PM close, prices had returned to Friday settle prices, a slight half a cent higher. Prices have currently stabilized at the $2.67 to $2.70 levels, but any significant adjustments in the coming days in weather could cause a move in either direction. If anything, Toronto is looking to stay warm up until the New Year! Note that due to last year’s warm winter, the January contract a year ago ended trading around $2.25. With the holiday season coming up, a couple of changes are to be noted. For one, this week’s storage report will be released on Wednesday as opposed to Thursday. Additionally, natural gas markets will close early at 1:45PM on Christmas Eve, and remain closed until the usual Sunday night open at 6PM EST. ~CL
December 18th, 2020 – Natural Gas Market Update | Happy Friday everyone, we are officially one week away from Christmas for those celebrating! For others, happy holidays, all the joy to whichever festivities you partake-in! Markets as per the norm this week, have been bumping up and down today. The January prompt month contract traded within a $0.07 ranged, climbing to a peak at 11AM before coming back down around $0.03 at the 2:30PM settle. At the time of writing, the contract has returned to it’s 11AM peak of $2.72. Lots of volatility coming and going these days! A quick reminder that natural gas trading comes to a halt at 5PM today and will resume trading at 6PM this Sunday, December 20th at 6PM. ~CL
December 17th, 2020 – Natural Gas Market Update | Yet another eventful day for the natural gas market. Prices started the day higher in anticipation of an EIA storage report number indicative of a tighter supply and demand balance year over year, but after the number came in right on market expectations, prices proceeded to decline to a low of $2.60. Mid-day weather model runs added demand to their 14-day forecasts which supported prices going into the close, but the market seems hesitant with an uncertain demand picture into the new year. Indications of milder weather in January will surely send prices plummeting downwards, but production levels off significantly this year compared to last, any above-normal weather demand will result in a reach back to the $3 handle. [EG]
December 16th, 2020 – Natural Gas Market Update | In all honesty, we could probably copy over yesterday’s market update if that’s any indication on today’s activity. The January prompt month contract traded over a range of $0.06, but ultimately settled half a cent lower than yesterday. Other contract months followed a similar pattern to January, so nothing really out of the ordinary. In other news, tomorrow marks another storage release. Recall that last week, after a larger than expected withdrawal, the market followed with a pretty steep climb. Early estimates last Friday for this week’s report looks at an average withdrawal (-) of 120.60 Bcf, a median withdrawal of 121.00 Bcf, with the range of 23 estimates being -138 Bcf to -103 Bcf. Tune back in tomorrow to check how it all actually plays out! ~CL
December 15th, 2020 – Natural Gas Market Update | Happy Tuesday, the countdown to Christmas is on everyone! Natural gas markets today saw inter-day up and down movement, but the January prompt month contract settled unchanged from Monday, on the dot at $2.682. Weather continues to influence price movements as forecast revisions are made throughout the day. All in all, trading has been relatively steady, and prices will most likely continue to trade in the $2.60 upward to the $2.70 range for the time being. ~CL
December 10th, 2020 – Natural Gas Market Update | Markets saw a significant jump today, settling just over 11 cents higher than yesterday. The rally was fueled by today’s U.S. Energy Information Administration (EIA) Storage Report at 10:30AM. Market consensus was centered around an 83 billion cubic feet (Bcf) withdrawal. The actual release showed a withdrawal of 91 Bcf for the week ending December 4th. Recall that a larger than expected withdrawal volume is bullish. Storage volumes act as the plug to the supply and demand equation. When demand is greater than supply, storage needs to be relied upon to balance out the natural gas deficit in the current marketplace. Other than just the storage report today, demand has been added as weather models go through revisions. Prices are now back to last Friday’s levels. Take care! ~CL
December 9th, 2020 – Natural Gas Market Update | Happy middle of the week! Today marked the first higher close for the week with the January prompt month contract settling four cents higher than yesterday. A colder overnight forecast translated into a rally that carried momentum up to just before 9AM. However, as the day progressed, warmer revisions to weather forecasts saw a decline up until 1PM. A climb was seen again slightly after, but prices ultimately moved downwards again into the 2:30PM market settle. At the time of writing, the January contract is back to the $2.43 level. An interesting note, is that the prompt month January contract is now trading lower in price than the February, March, and April contract. This can be seen as reflective of market sentiment. Although a warm winter is to be expected for the time being, further out forecasts always hold less certainty, leaving room for potential change. With that in mind, act upon it, and look to lock in your natural gas rate with a fixed plan while the markets are trading low! Alleviate your worries now regarding higher gas prices in the future. Make sure to browse our website or give us call if you have any questions on how RiteRate can help you in selecting a plan that satisfies your needs. Have a great night everyone, see you all tomorrow! ~CL
December 8th, 2020 – Natural Gas Market Update | Natural gas futures prices traded within a wide range before ultimately settling close to unchanged. In contrast with yesterday’s plunge in prices, we saw that later-dated contracts in the summer and winter of 2021 rose a few cents. Driving today’s move higher was day over day changes in weather forecasts that expect to see colder changes towards the end of the 14 day outlook. Could this be a signal of a potential trend reversal or will additional warm weather follow suit, causing further losses for the January 2021 contract? Tune in tomorrow to find out more! [EG]
December 7th, 2020 – Natural Gas Market Update | Welcome back to yet another Monday! Countdown is on for Christmas, only 18 more sleeps until we’re there. Natural gas prices are falling yet again with the January prompt month contract falling 15 cents today from when the market opened yesterday at 6PM. Revisions to the weather models over the weekend are once again showing warmer weather, possibly another top 10 warmest winter, following the top 4th warmest November we just had. Weather revisions throughout the day today were tame however, with minimal day time volatility. Although weather is one of the predominant factors in winter natural gas pricing, the net position of the market is contributing as well. The natural gas market so far has seen an excess of long positions (buyers of contracts). As the year looks to round out, most market participants will look to liquidate their positions, taking off uncovered positions. Selling pressure will drive prices down as supply becomes abundant. It is important to remember that this event does not happen frequently, and we can see that the market has since climbed a tad and flattened once again after hitting a low of just under $2.40. With prices at their lowest, you may want to consider the options that RiteRate has for you! By locking into a fixed-rate contract, you can hold on to low natural gas rates no matter what the market does. Tomorrow will be a whole new day, so make sure to tune back in the catch-up on our daily market update! ~CL
December 4th, 2020 – Natural Gas Market Update | After selling off throughout the week, prices for natural gas retraced higher with the January contract settling almost 7 cents higher. The relief rally may be short-lived however, as the base state for weather continues to favor a warmer regime similar to last year. This warmth will outweigh strength in LNG exports and tightened year-over-year production levels as it slashes the space heating demand for natural gas throughout the country. [EG]
December 2nd, 2020 – Natural Gas Market Update | Markets appeared to rally early on in the trading day, but fell shortly after 9AM. The prompt month January NYMEX natural gas contract fell approximately $0.17 from peak to close at 2:30PM, down another $0.02 at the time of writing. Downward price pressure for the day was attributable to low cash market prices. The cash market is the daily market for natural gas. As opposed to securing natural gas for the following months ahead of time, the cash market provides supply in the current month (i.e., December). Pricing in the cash market is tied to natural gas futures contract pricing in a way that makes the two market options equivalent to participants. In theory, buying physical natural gas now and holding it until January should be equivalent in price to entering a natural gas futures contract and receiving the gas directly in January. More on this will be explored soon in our Natural Gas 101 with RiteRate! series, so make sure to tune back in! ~CL
December 1st, 2020 – Natural Gas Market Update | While the settlement for the January 2021 natural gas futures contract was close to unchanged from the previous day, the price change does not reflect the dramatic reversal in overnight weather forecasts. Yesterday afternoon’s European ensemble forecast built the case for a bullish setup, but the overnight run dropped a sizeable amount of weather derived natural gas demand, prompting a sell off the of the previous day’s gains. [EG]
November 30th, 2020 – Natural Gas Market Update | Happy last day of November! Everyone’s back after the American long weekend, and natural gas prices climbed to Friday open levels early on in the day. The colder overnight weather model reports along with strong cash market prices helped in fueling the rally. Momentum was halted however in the January prompt month contract once it crossed the $3 mark. Midday weather model releases hinted at colder weather on the horizon near mid-December throughout Canada and the U.S. as well as Europe all the near-term is somewhat bearish still. Prices will most likely continue to trade slightly under $3 tomorrow, testing that resistance level. ~CL
November 27th, 2020 – Natural Gas Market Update | Natural gas futures settled lower on Friday as forecasts for milder weather are priced into the market. Given the Thanksgiving holiday in the United States, trading volume and liquidity were lighter than usual which may have allowed prices to be pushed around more easily. Trading action resumes at 6PM EST on Sunday evening, wherein traders will be reviewing changes from over the weekend and factoring them into their supply and demand models for the months ahead. [EG]
November 26th, 2020 – Natural Gas Market Update | Happy Thursday and American Thanksgiving to anyone celebrating or know someone celebrating. The U.S. stock market is closed today and only trading for a half day tomorrow. For the natural gas contracts trading on the New York Mercantile Exchange (NYMEX), although the market’s still open, albeit with an earlier close, minimal activity was seen today. As a supplement to a rather uneventful market update today, check out our introductory post here to our new up and coming series: Natural Gas 101 with RiteRate!, and our first post: What is Natural Gas? ~CL
November 25th, 2020 – Natural Gas Market Update | Natural gas futures contract prices settled in the green for a third consecutive day as weather models continued to add colder temperatures to their 14-day forecasts. Earlier in the morning, a report from the Energy Intelligence Agency noted that a smaller draw than expected was pulled from storage, but that did not stop the December contract from settling up $0.121 or 4.4% on the day. With tomorrow being the Thanksgiving holiday in the United States, energy markets will be closed, however we will continue our market coverage for Friday’s open. [EG]
November 24th, 2020 – Natural Gas Market Update | Happy last Tuesday of November, it feels like yesterday when I wrote a very similar line for October… Weather is finally turning around, and natural gas prices are reflecting such. Gas-weighted degree days (GWDDs) are used to gauge weather and subsequent demand. Since yesterday, 19 and 9 GWDDs have been added in the Global Ensemble Forecast System (GEFS) and the European Center for Medium-Range Weather Forecasts (ECMWF) respectively. The December prompt natural gas contract climbed approximately $0.08 today since yesterday’s close, a shift upwards seen in the following months as well. Overall, we are now up around $0.20 from the low seen back on November 19th. Tomorrow marks the last trading day for the December NGZ2020 contract, so it’ll be interesting to see how and if pricing diverges from the rest of the natural gas curve. Weather aside, this week marks one slightly out of the norm due to those down south observing Thanksgiving this Thursday. Markets will be closed for trading, and the EIA storage report will be released tomorrow. This week’s early survey looks at a range of withdrawals instead of injections between 10Bcf to 47Bcf, average of 29.1Bcf withdrawals, median of 29.5Bcf withdrawals. Tune in for how the storage report actually goes and for news on what happens after the 10:30AM release! ~CL
November 23rd, 2020 – Natural Gas Market Update | As day-over-day weather models continue to add projections for space heating demand, prices have found a steady amount of support to move modestly higher. Atmospheric teleconnections indicate that the warm base state will likely persist into mid-December, however there is a risk for upside to natural gas prices should weather forecasts continue to trend in the colder direction. [EG]
November 20th, 2020 – Natural Gas Market Update | Happy Friday everyone! Yesterday marked a day of new relative lows in natural gas prices, but today saw a slight climb upwards. Although not much has changed in terms of weather models, prices in the prompt month December contract rose over 2%, carrying the momentum yesterday’s from overnight trading session. Prices will most like stay within a tight range as trading activity dwindles over the weekend, but there is still the possibility of a move in either direction depending on any changes in underlying fundamentals. The biggest one to watch for continues to be weather, so any revisions to forecasts will be reflected close to immediately. ~CL
November 19th, 2020 – Natural Gas Market Update | Today saw another down day in natural gas trading. At it’s lowest, the prompt month contract fell 6% from yesterday’s settlement price of $2.712. Downwards pressure resulted once again from the extended persistence of warm weather. Although it is colder here in Canada, the natural gas contract pricing benchmark is in Louisiana, where warm temperatures hold. On another note, today marked another U.S. Energy Information Administration storage report day. This week’s number came in at an injection of 31 Bcf, on the higher side. However, prices were not materially affected by the news. As mentioned before, during the winter months, weather becomes the predominant in pricing. A warmer week will lead to less demand. This subsequently leads to a supply surplus, and increased injections as storage looks to balance supply and demand. With this in mind, storage releases look are now looking to more so simply confirm weather impacts. ~CL
November 18th, 2020 – Natural Gas Market Update | Happy middle of the week! Today marked a rather uneventful trading day. With little to no major changes in weather forecasts, it looks like we’re on par to experience the third warmest November since 1950. The December natural gas contract saw a slight climb early on today, but ultimately came back down at the 2:30PM to settle at $2.70 levels, similar to yesterday. Looking further ahead, weather forecasts are expecting continued warmth, now pretty well into December. Tomorrow marks another storage report release day. As of last Friday, early views for this week’s number ranged from an injection of 12Bcf to 50Bcf with an average of 25.4Bcf, and a median of 25.5Bcf. As per last week, join in on the fun and put in your guesstimate as well! Recall that storage is considered a plug to balance the supply and demand of natural gas available in the market. A higher injection number is bearish (i.e., You see pricing downside in the near future), signalling that supply > demand, while a lower number is bullish (i.e., You see pricing upside in the near future). ~CL.
November 17th, 2020 – Natural Gas Market Update | After yesterday’s tumultuous sell-off, natural gas markets were quieter today, with the December futures contract trading within a modest range. Prices ultimately settled just under their closing settlement yesterday as weather models continue to indicate the persistence of above average temperatures heading into the beginning of December. This November stands in stark contrast with the colder weather experienced for the last two years, highlighting just how volatile and prone to swings weather-related demand for natural gas can be. [EG]
November 16th, 2020 – Natural Gas Market Update | Happy Monday once again, and what a Monday it has been. Exiting last week on Friday, November the 13th, it looked as though natural gas prices were stabilizing. Entering this week, we aren’t so sure anymore. Since Friday evening, natural gas saw a huge sell-off, with the prompt month December contract dropping around $0.20 on Saturday. A similar drop was seen today, over 10% down from where it opened. Driving the downward pressure on pricing is the increasingly warm forecast that now looks to carry forward into early December. Additionally, power burn demand for natural gas has decreased while production has increased some, widening out the previously tight supply demand balance. As prices fall though, there is the possibility that producers will halt operations again, and that power burn will return to the use of natural gas as opposed to coal. ~CL
November 12th, 2020 – Natural Gas Market Update | Happy Thursday! Today marked another rather uneventful trading day for natural gas. Prices were bound by a rather tight $0.10 range, ultimately settling back at previous day levels. The near-term forecast has reflected some colder patterns stemming from up north. However, until a major revision is made to the forecast models further out, the outlook for this winter still looks to be on the warmer side. Price action will prove to be rather stagnant for the time being… Although today would normally be natural gas storage day, we’re a day behind this week, so make sure to tune back in tomorrow for official numbers! Early views show a pretty wide range of analyst estimates from a 12 billion cubic feet (Bcf) withdrawal to a 7 Bcf injection. The median sits around -3 Bcf, also the case for the top 5 survey’s average. Recall that this week’s report is looking at data for the week ending November 6th, 2020, which was rather warm. Join in on the fun, and place a guess on where you think the storage report will come out to be. ~CL
November 11th, 2020 – Natural Gas Market Update | Natural gas futures traded in a choppy range throughout Thursday’s trading session, but broke out to the upside after an afternoon 14-day weather model run turned decidedly colder. By the end of the day, the December futures contract gained $0.082 to settle at $3.031. This marks the second day settling positive after six days of selling off due to November’s warm weather pattern slashing the demand for space heating throughout the country. [EG]
November 10th, 2020 – Natural Gas Market Update | Happy Tuesday! Following the release of colder trends in the forecast and a drop in production volumes, natural gas prices saw a slight climb today. The prompt month December contract rose 3%, offering some relief from the 50 cent drop. While the supply and demand balance remain tight going forwards, weather is still proving to be the stronger factor. Although colder days are expected for the near term, the 11-15 day weather runs are signalling prolonged warmth, potentially extending into early December. Overall, pricing is expected to remain stable for the time being, but we’ll keep you updated in the case of unexpected moves! ~CL
November 9th, 2020 – Natural Gas Market Update | The battle between the bears and the bulls continued during today’s trading session. Weather patterns continue to show temperatures well above normal, decimating expectations for space heating related demand for the start of the winter season. On the other hand, however, LNG feedgas demand has held near record levels of 10.5 Bcf/day, offsetting the demand loss due to unseasonably mild temperatures. Another interesting development to surface today was the announcement from Pfizer that early data suggests the shots of their vaccine candidate may be 90% effective at preventing COVID-19. ( For a detailed read, I suggest this CBC article: https://www.cbc.ca/news/health/covid-19-vaccine-pfizer-faq-1.5795486) [EG]
November 5th, 2020 – Natural Gas Market Update | Happy Thursday, Friday Jr., and natural gas storage day! The natural gas market saw another down day today. After a climb early in the day before 7AM EST, the rest of the day only saw red. The prompt month December contract ended up closing out roughly $0.10 down from yesterday. As mentioned before, the weekly storage report released by the U.S. Energy Information Administration (EIA) reflects data from the week prior. This week’s release looked at data from the week ending October 30th. Following early predictions, the EIA reported a withdrawal of 36 billion cubic feet (Bcf), approximately 7 Bcf greater than analysts consensus. This also marks the first weekly net withdrawal during the month of October in more than 10 years, reflective of the cold week experienced. A greater than expected report typically would insinuate stronger prices as supply and demand are tighter, but markets barely responded to the news. We can see now, that storage is no longer as large of a concern going into the winter, since sufficient levels have been reached. Instead, the main focus will remain on weather, especially since warmth is now expected to be seen up to the end of the 21 day forecast. ~CL
November 4th, 2020 – Natural Gas Market Update | The steep downward momentum of the last two trading sessions was slowed today with the December contract rebounding up from the intra-day level of $3.00/MMBtu to settle at $3.046, slightly negative to yesterday. With the month of November on track to potentially be the 5th warmest on record (throughout the United States nationally), there are some serious headwinds for higher prices over the remainder of the month, however with the supply and demand balance as tight as it is, any manifestation of colder temperatures in the 14-day weather forecasts could be the catalyst for a price spike higher as we head into the colder winter months. [EG]
November 3rd, 2020 – Natural Gas Market Update | Happy first Tuesday of November everyone, US election day paired with an overall moving day in the natural gas market. This morning saw a pretty extreme revision to the warmer side in the upcoming forecast. In turn, the winter strip, (i.e., December to March), saw an average downward change of $0.18 from yesterday’s settle, and a overall $0.30 downward move from pricing highs over the weekend. The midday weather run saw a slight adjustment that slowed some of the momentum. Prices are now somewhat stable, having reached a previously seen support level. We can truly see the impacts of weather now on winter pricing of natural gas. If another significant revision occurs, we’ll see another move. At this point though, either direction is possible.In other more general terms, welcoming a new addition, please say hello to the addition of fun facts on natty gas. We know that natural gas can seem “dry” at times, but we promise there’s a lot to uncover. Make sure to tune in tomorrow for new updates, especially post US election. Additionally, the launch of an educational series on natural gas is in the works. Stay safe everyone, see you tomorrow! ~CL
November 2nd, 2020 – Natural Gas Market Update | After closing the previous week at contract highs, prices for the December natural gas futures contract plunged $0.11/MMBtu or 3.5% during today’s trading session. Driving today’s price action was the shift to a weaker-demand weather pattern in the 14 day forecast, with indications that warmth could persist into the second half of November. Supply and demand balances continue to remain tight compared to the 5-year average, with production significantly lower than last year and LNG exports hitting new record highs above 10 Bcf/day over the weekend; however, price direction will be determined by the amount of weather-related heating demand going forward. [EG]
October 30th, 2020 – Natural Gas Market Update | Despite warmer temperature changes in day-over-day weather model forecasts, futures contract prices for the December 2020 to March 2022 time period surged 1.5% higher from yesterday’s settlement price, indicating that the market is more concerned with the tight supply and demand balance than it is with fluctuations in weather demand. Feedgas demand for LNG export facilities has reached a new all-time record high, with 9.7 billion cubic feet of natural gas being utilized for export to European and Asian markets. LNG exports out of the U.S. Gulf Coast have grown substantially since 2018, and at roughly 10 Bcf/day, they now represent about 10% of demand for natural gas within the U.S. and Canada. [EG]
October 29th, 2020 – Natural Gas Market Update | Today has been one of the most exciting first trading days in a while. The December futures contract rolled over as the prompt month and saw tonnes of up and down pricing movements. A lot of different factors contributed, and it seems that the bulls are overpowering at the moment. The day started of relatively weak, a result of a warmer shift in the overnight forecast, dropping over 15 cents from the high before slightly recovering. The US Energy Information Administration (EIA) released their storage report at 10:30AM EST as per usual, triggering some big moves. The median of analyst estimates had come in at 37 billion cubic feet (Bcf). The EIA report posted 8 Bcf under at 29 Bcf, enough momentum to carry prices upwards until midday. This report also marks the last one where we’ll be seeing a positive injection number, as the industry has already started withdrawing, early estimates looking at 12 Bcf. Trading for the day settled close to yesterday, which seems to be a new trend these days. Make sure to tune back in tomorrow, to see how natural gas looks to wrap up the week.
October 28th, 2020 – Natural Gas Market Update | Happy midweek again everyone! Time is really flying by, only four days left until November hits. Today marked the expiration of the prompt month, November 2020, futures contract. Prices stayed quite strong until the end, closing out just below $3US/MMBtu. The remainder of the contracts December onward have been fairly steady, settling just slightly lower than the previous day. The constant fundamental mentioned on the daily is still weather. Overall, slightly colder moves in the forecast revisions continue. While the Rockies have gotten an early start on the winter memo, temperatures early November are looking warmer both there and everywhere else. The cold advancing eastward is still possible and on the forefront, and if resulting demand turns to be above normal, we could see substantial upward price risks. With the general bullish sentiment, signalling the market’s beliefs in high prices this winter, this could be the starting point to a pretty steep climb. Fear not however as RiteRate’s January start date fixed rate natural gas contracts are still open for sign-ups and renewals! Our contracts will ensure protection against upside price risk, and we’ll always work with you to ensure that your rates are boringly predictable for terms of up to 5 years. Make sure to browse our site or give us a call with questions at (416) 862-0322.
October 26th, 2020 – Natural Gas Market Update | Hello to the last Monday of October! This week in the natural gas world, we’re expecting a lot of price volatility. Especially so for prompt month November who’s last trading day is this Wednesday, October 28th, 2020. With that being said, today was a fairly stable trading day, reaching new price highs early on in the day, before a decline midday, followed by a ramp-up into the market settlement at 2:30PM to return prices to around the same levels as this morning. The same pattern was seen as well in the subsequent months. A look at the fundamentals shares the following. The Gulf of Mexico isn’t clear just yet as Tropical storm Zeta has emerged, but overall disruption is expected to stay at a minimum, if not for increased rainfall. Overnight models were colder, but as per usual, midday models undid some of those adjustments to the warmer side further out. Options on the natural gas futures contract expires tomorrow, so we’re expecting lots of fluctuations and potential downside. Make sure to come back for more details on how everything plays out Tuesday afternoon!
October 23rd, 2020 – Natural Gas Market Update | Prices of natural gas contracts for winter months eased today after weather forecasts continued to reveal day over day above-average temperatures for the first week of November. The supply and demand balance for these months remains tight due to gradually declining natural gas production levels, however, it remains to be seen how much of a wildcard winter weather demand will be. While the influence of tropical storms and hurricanes has largely subsided at this point in the fall season, we still expect heightened price volatility to continue on the back of this variable weather demand piece.
October 22nd, 2020 – Natural Gas Market Update | Following a U.S. Energy Information Administration storage report that came in slightly smaller than expected for last week, the price of the November contract for natural gas held near 20-month highs and ultimately settled $0.02 US/MMBtu lower from yesterday’s settlement price. The governmental agency reported that U.S. utilities injected 49 billion cubic feet of gas into storage, raising the total national inventory level to 3,926 billion cubic feet for the week ending October 16th, 2020. Traders shrugged off this mildly bullish number that is reflective of a tighter supply and demand balance compared to previous years; however, after a recent run-up in prices due to stronger LNG export levels and added weather demand in the 14-day forecast, it makes sense that prices would pull back and consolidate lower.
October 21st, 2020 – Natural Gas Market Update | Happy middle of the week everyone! It feels as though we’re repeating the same factors everyday, but weather forecasts revisions to the colder side and LNG volumes have driven prices up further. The prompt (or next month, i.e., November) futures contract set new highs today, reaching and surpassing the US$3.00 mark. Prices in the cash market have also been climbing and reflecting in futures. Additionally, the storage injection season is coming to an end within the next 10 days. Come November, previously stored volumes will be withdrawn to balance out the demand surplus in the winter months. Weather will be the ultimate make or break it point for pricing in the upcoming months. An early storage outlook for tomorrow is that the injection will be around 47 billion cubic feet (Bcf) to 49, a slight increase from the previous week’s 46 Bcf injection. Overall though, unless the number released varies significantly, not much will change in pricing as most participants have already priced in the impact, looking only for confirmation.
October 20th, 2020 – Natural Gas Market Update | Guess who’s back the week? Volatility. Now seen in inter day swings and the contract month decoupling in some instances from each other. Bullish sentiment was seen this morning primarily from November to January. Additional heating degree days had been added to the forecast and liquefied natural gas (LNG) demand increased to 8.5 Bcf, up 0.5 Bcf from the previous report. Momentum was halted at noon following revisions to the forecast for warmer weather. LNG exports have returned to pre-hurricane levels so further volume changes will hold less significance. Pricing will be heavily dependent on weather forecasts moving forwards, especially with a warm November expected. All-in-all, at the time of writing, November prices settled +$0.10 today, while December 2020 to March 2021 fell on average $0.02. Tomorrow marks another mid-week check-in, so make sure to come back for storage estimates in preparation for Thursday’s EIA release and ongoing changes!
October 19th, 2020 – Natural Gas Market Update | Natural gas futures traded in a relatively tight range in today’s session, perhaps reflecting the lack of clarity in 14-day weather model guidance and the timing of progress relating to the restoration of LNG export levels at facilities along the U.S. Gulf Coast. If export levels continue to hold above 8.0 Bcf/day heading into November and beyond, weather model forecasts for additional above-normal demand would serve as the catalyst that could fuel a strong rally upwards in price. Should any issues come up for these facilities, which have been battered by hurricanes and logistical issues this fall, prices could respond bearishly as a result. For more coverage of the situation, be sure tune into tomorrow’s update from the RiteRate team.
October 16th, 2020 – Natural Gas Market Update | Happy Friday everyone! Time has really flown by as we welcome mid-October. A couple of different things have happened today resulting in some ups and downs. Additional demand has been added to reflect a colder forecast, but a warm November start is still on the horizon. In fact, the adjustments to the forecast weren’t enough to prevent a pretty steep drop in November prices this afternoon. The sunken barge near the Cameron liquefied natural gas facility is proving to be a bigger problem then expected. News has been floating around that it could take up to three weeks to clear, meaning three weeks of reduced natural gas feed gas demand while production looks to stay steady or even increase. All in all, another volatile week has come and gone. We expect the trend to continue for the time being as no one factor dominates the influence on market sentiment. Have a great weekend, and make sure to stay safe and tune back in for more news next week!
October 14th, 2020 – Natural Gas Market Update | November prices have come down yet again today, although the downward price pressure has been limited out to March 2021. Yesterday we mentioned that the market was bullish due to the minimal disruption from Hurricane Delta. Today other factors have changed that outlook. Warmer weather expectations for early November are being reflected with constant forecast updates. The Cameron liquefied natural gas facility is also facing limited access from a sunken barge, reducing the demand for natural gas. A lot of uncertainty surrounds the timeline for resolution here, so we’ll have to wait and see how things play out. Lastly, some supply of natural gas has already returned as producers rejoin the marketplace. Tomorrow marks the weekly release of the Energy Information Administration’s (EIA) natural gas storage report as we look to round out the shorter week. See you then!
October 13th, 2020 – Natural Gas Market Update | Natural gas futures for the upcoming winter settled moderately lower after trading within a tight range throughout the day. Prices had moved higher yesterday in the aftermath of Hurricane Delta; it had became clear that there would be only minimal disruption to liquefied natural gas export facilities on the Gulf Coast. Weather forecasts had also called for temperatures moving colder in the 14-day outlook yesterday, however, overnight and mid-day weather model runs erased some of the additional forecasted demand. As we head into the start of the winter season in November, these weather model runs will be closely watched by traders looking to derive implications for natural gas demand. Stay tuned for more coverage as the situation unfolds.
October 9th, 2020 – Natural Gas Market Update | Happy Friday! It’s been a whirlwind of a week but we have made it. Welcome to our daily blog post, a little earlier than usual today, but lots of news all the same. Natural gas prices have been on a steep climb today led by November all the way out to March 2022. Over the past few days, demand volume has been consistently added to analyst forecasts, an accumulation from colder weather projections and the outlook that Hurricane Delta won’t hit as many export facilities as the previous few hurricanes. Higher prices are expected to continue until anything major changes, especially for the winter of 2020 and beyond. Hope everyone has a safe Thanksgiving long weekend, see you Tuesday!
October 8th, 2020 – Natural Gas Market Update | The prompt month of the November contract for natural gas traded within a wide range today following the release of the EIA’s weekly storage inventory report, which reported a net injection of 75 billion cubic feet of natural gas for the week ending October 2nd, 2020. Prices shrugged off the slightly bearish report and strengthened over the course of the day as weather model runs added demand in their 14-day outlooks for another consecutive day. It remains to be seen whether this demand will persist into the month of November, but provided it does, prices will respond bullishly.
October 7th, 2020 – Natural Gas Market Update | The talk of town is still Hurricane Delta. Although not on the forefront of our minds here in Canada, the natural gas community can’t seem to get away. Our blog post yesterday summarized it’s potential impacts. As Delta’s projected arrival this Friday appears on the horizon, the market has been responding in turn. Volatility and uncertainty were key words earlier this week, but today saw a return to a more stable state. Prices are starting to climb again! A significant volume of natural gas is drilled in the Gulf of Mexico. Suppliers in the region will look to halt production temporarily in the news of an upcoming storm. This effectively reduces the supply available to meet the existing demand, making what is available more valuable.While the magnitude and duration of impacts arising from Delta aren’t certain at the moment, the market is still looking at higher natural gas prices this winter and beyond. Protect your home or business from price increases by signing up for a fixed-rate natural gas contract with RiteRate. We’ll always work with you to keep your natural gas rates … boringly predictable. Thanks for dropping by, make sure to tune back-in tomorrow!
October 6th, 2020 – Natural Gas Market Update | After a morning rally that sent the prompt month November contract upwards to the 2.70 level, prices fell sharply and settled at the 2.52 US/MMBtu level on concerns that Hurricane Delta could disrupt more liquefied natural gas exports than Gulf of Mexico production.
The most recent hurricane trajectory from the NOAA has Delta heading directly for Louisiana, where a number of export facilities are located. With the damage to LNG facilities from recent hurricanes fresh in traders’ minds, it makes sense that traders are accounting for the potential downside risk to LNG being offline should the hurricane significantly disrupt LNG exports.
October 5th, 2020 – Natural Gas Market Update | Volatility is in the air and everywhere! After natural gas prices fell to a low point last Friday, they saw a significant rebound today for all months until March 2023. A lot is changing and affecting the natural gas market these days. A few highlights include: constant adjustments to the weather forecast, concerns on the high volume of excess gas in North American storage facilities, and the arrival of tropical storm Delta expected to hit and hinder production regions this Friday. Prices will look to bump around for this week as uncertainty continues to be on the horizon. Looking further out however, the general market sentiment leans toward higher winter prices extending into 2021 and beyond. Look to take some of that uncertainty off the table by locking into a fixed-rate contract with RiteRate. We’ll always work with you to keep your natural gas rates … boringly predictable. Make sure to tune back-in tomorrow for another Natural Gas Market Update!
October 2nd, 2020 – Natural Gas Market Update | Natural gas futures settled lower in the day’s trading session, testing their lowest level since August 13th. Forecasts for weakness in weather-driven demand, flat liquefied natural gas (LNG) export levels, and concerns regarding storage reaching containment levels before colder weather arrives have been encouraging long traders to offset their positions and aggressive short-sellers to press prices lower. We expect prices will trade sideways to lower throughout the first few weeks of October as the U.S. and Canada experience continued mild national weather conditions, however, the resumption of higher LNG export flows or a colder shift in the weather pattern could act as the catalysts needed for a retracement to September price highs.
October 1st, 2020 – Natural Gas Market Update | The national weather forecast for the next fourteen days paints a weak picture for natural gas demand which will continue to weigh on near-month contracts. At the time of writing, the winter strip price, November 20 to March 21, has fallen 2.3% throughout today’s trading session. We expect that prices will continue to trade sideways to lower until additional weather-related demand materializes.