The Weekly Natural Gas Market Newsletter

November 14, 2022

Natural Gas News & Notes

The December NYMEX natural gas futures contract settled 52.1 cents lower at $5.879. The contract traded in a $1.50 cent range during the week posting a high of $7.22 and a low of $5.72. Early in the trading week, concerns about some early season below normal temperatures expected to start hitting several key consumption regions by week's end led a bullish move in pricing. However, new concerns about the delay of the Freeport LNG facility restarting reclaimed news headlines and pushed the contract lower by week's end.

For the week ending 11/4, the EIA reported an injection of 79 BCF of gas into storage. Current inventory levels now sit at 3,580 BCF which is just 1.0% below last year's level currently and only 2.1% below the previous 5‐year average. Early estimates for next week indicate that another injection is expected near 65 BCF.

Daily volatility in natural gas pricing has increased significantly over the last few weeks. The 20‐day standard deviation of the daily price move as a percentage has spiked back up to the highs of July and February at more than 7%. The increase in volatility is primarily driven by significant changes in production, LNG exports and weather. Daily natural gas production peaked in early October only to be hamstrung by pipeline maintenance and outages. November weather started off more than 30% warmer than the 10‐year normal only to shift colder forecasts which ultimately could result in the month of November ending up colder than normal. New news regarding Freeport's delayed restart was a significant enough event to erase a weather demand induced price rally. With so many fundamental factors influencing pricing, a continuation of daily price volatility is expected to be seen.