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 [email protected] or give us a ring at (416) 862-0322. Happy reading!
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.