In a quieter rangebound trading session, the NYMEX front month settled $0.78 USD/MMBtu or 2% higher at $3.47 USD/MMBtu. The front month is now approaching the three-month high settlement of $3.50 USD/MMBtu, reached on October 7th. Traders continued to weigh the recent revision of weather forecasts, adding heating demand to the start of November. Following today and yesterday’s rally, the market has now shifted into overbought territory.  

In Western Canada, production is at near three-month highs of 17.3 bcf/d, and LNG Canada flows have dropped from early-month highs of 700 MMcf/d to 450 MMcf/d. The aforementioned weather revisions were largely focused on eastern North America, resulting in AECO markets experiencing less of a rally compared to the NYMEX and Dawn. This has caused the Dawn-AECO basis (transport cost between markets) to widen by over $0.30 CAD/GJ. (PB)