The penultimate day of any NYMEX contract is often volatile as options expire. Today proved to be no exception as the November contract fell $0.10 USD/MMBtu or 2.8% to settle at $3.34 USD/MMBtu. On average, the next year (Nov-25 to Oct-26) fell $0.09 USD/MMBtu or 2.3%.   

Aside from contract expiration, the drop can also be attributed to warmer weather forecasts. The start of November is now forecasted to be slightly above normal, with temperatures as high as 10°C in Ontario during the second week of November. The 10-year normal for that time of year is around 3°C. As we enter the winter season, weather forecasts will become the driving factor in market pricing.  

Canadian production set a seasonal high today of over 18 bcf/d, as Albertans producers bring on more production during these (comparatively) favourable AECO cash prices over $1.50 CAD/GJ. Producers are also benefiting from LNG Canada flows ramping up through October.    (PB)