Following yesterday’s rise, traders were conflicted on market direction today. Markets varied from down 2% to up 2% before ultimately settling 1% lower at $4.53 USD/MMBtu. The market remains in a thinly balanced scenario where demand is ramping up, but supply appears ready to meet it. High LNG flows and cold initial Winter forecasts are providing bullish support. But the record production volumes, strong storage inventories, and lower cash prices support an imminent correction.  

In the two-week weather forecast, Canada revised colder, with Alberta taking the brunt of the revision. Temperatures in the province are expected to reach as low as -10°C at the end of November, well below the seasonal average of -4°C. The weather in Alberta should be closely monitored when we enter the heart of Winter. Temperatures below -25°C pose a risk of freeze-offs, where production wells cannot draw as much gas from the ground. When this occurs, prices in demand regions, like Dawn, will spike. (PB)