Hints of Autumn Weather, Production Strength Weigh on Natural Gas Weekly Cash, Futures Prices - Natural Gas Intelligence (2023)

Spot natural gas prices softened during the Aug. 31-Sept. 2 trading period, with heavy rains and less intense heat spreading across the Lower 48. The West Coast was the only exception, and the region recorded huge spikes as California baked under triple-digit temperatures. NGI’s Weekly Spot Gas National Avg. fell 11.0 cents to $8.875/MMBtu.

Hints of Autumn Weather, Production Strength Weigh on Natural Gas Weekly Cash, Futures Prices - Natural Gas Intelligence (1)

Futures prices also caved as production held near all-time highs and storage data confirmed looser balances. Whether bears have finally gotten the upper hand in the market remains to be seen, but the October Nymex futures contract settled Friday at $8.786, down 55 cents from Monday’s close.

With the long Labor Day weekend ahead, prices moved decidedly lower as heavy rains were expected to douse some plans for backyard grilling. But hot weather was still very much in the forecast.

AccuWeather said temperatures on the East Coast would soar into the 90s beginning on Saturday, with humidity on the rise as well. As the higher humidity levels settle over the region, there also is expected to be an increase in showers and thunderstorms. By Sunday, a zone of showers and thunderstorms should expand from the Ohio Valley to the central Appalachians and into the western part of New England.

“In this zone, the downpours may be frequent enough to spoil outdoor plans much of the day,” AccuWeather senior meteorologist Alex Sosnowski said. “Even though much of the Northeast is in need of rain in terms of drought, downpours could lead to incidents of urban flooding.”

Even against that backdrop, Transco Zone 6 non-NY cash prices fell 72.5 cents week/week to average $8.150. Tenn Zone 6 200L dropped 70.0 cents to $8.370.

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After several days of rain in the forecast, more was on the way along the Gulf Coast through the Labor Day weekend. As demand was set to fall, cash prices at the Houston Ship Channel slipped 35.5 cents on the week to average $8.470. In West Texas, Waha dropped 14.5 cents to $8.025.

Henry Hub was down 48.5 cents week/week to average $9.060.

With temperatures in Death Valley poised to hit record levels of 125 degrees by Friday, cash prices surged across California and the Desert Southwest throughout most of the week.

Despite a pullback on Friday, KRGT Del Pool prices managed to spike $5.300 on the week to average $14.920. SoCal Citygate jumped $5.240 to average $15.015, while Malin picked up a more moderate 53.0 cents to $9.335.

The sweltering heat, combined with low output from drought-stricken hydro-electric generators, prompted California regulators to implement several measures in an effort to maintain reliability.

Some of these were aimed at getting Californians through the latest heat wave. For example, the California Independent System Operator called on consumers to reduce their electricity usage in the afternoon and evening hours on several days this week.

Other measures were more long term in nature. Late Wednesday, California’s final legislative session ended with a bill sent to Gov. Gavin Newsom that would extend the life of the Diablo Canyon nuclear generating facility through 2030. It had been scheduled to be fully retired by August 2025.

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Have Futures Turned A Corner?

After a long summer of record heat, stagnant production, soaring global gas prices and robust power burns, the gas market appears ready to take gas prices down a few notches.

Though summer is not quite over, October futures fell sharply ahead of the Labor Day weekend. Notably, despite some wild fluctuations at the start of a new month, production appeared to hold near all-time highs on Friday.

This is significant since supply has been seen as key for balancing the market after soaring gas prices did little to stem demand.

East Daley Analytics said dry production for the Aug. 25-31 period averaged 97.5 Bcf/d, with estimates for August production averaging 97.9 Bcf/d.

The Permian Basin is most responsible for the firm’s bullish gas supply outlook for the second half of 2022 and into 2023. Permian gas samples rose nearly 8% (372 MMcf/d) month/month in August, according to the firm.

“Is this growth real or a head-fake?” said East Daley’s Rob Wilson, vice president of analytics. “Daily pipe scrapes have become a less reliable indicator of Permian dry gas production over time, as a higher share of supply growth shows up on new Texas intrastate pipelines. Even so, there is reason to believe the recent uptick in the gas sample is real.”

Meanwhile, recent storage data has shown loosening in supply/demand balances in each of the past two reports.

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On Thursday, the Energy Information Administration (EIA) said inventories for the week ending Aug. 26 rose by 61 Bcf. By comparison, EIA recorded a 21 Bcf injection for the year-earlier period, and the five-year average injection is 46 Bcf.

The 61 Bcf build lifted stocks to 2,640 Bcf, which is 228 Bcf below last year at this time and 338 Bcf below the five-year average.

Broken down by region, the Midwest led with a plump 33 Bcf increase in stocks, according to EIA. The East added 16 Bcf to inventories, while the South Central added 10 Bcf. This included a 9 Bcf increase in nonsalt facilities and a 1 Bcf rise in salts. Mountain inventories were up by 4 Bcf, while Pacific stocks slipped by 2 Bcf.

Despite the larger-than-normal injection – the second in a row – a steep uphill battle remains for the market working to replenish stocks to more comfortable levels ahead of winter. Market observers on online energy chat Enelyst were steadfast in their projections for end-of-season storage stocks of 3.4-3.5 Tcf. October weather would “matter a lot this year,” said one market observer.

Noting the continued strength in futures prices, Enelyst managing director Shah said the EIA’s latest storage data pointed to looser balances, but “simply running the weekly looseness out is misleading.” He sees stocks rising to 3.43 Tcf on Oct. 31 despite production being higher by 4-5 Bcf/d and the Freeport liquefied natural gas terminal being offline.

“Power burns at these levels have been incredible,” he said.

Massive Cash Losses

The typical holiday weekend retreat was seen across all U.S. cash markets on Friday. Trading done on Friday was for gas delivery through Tuesday.

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Widespread losses were seen, with California recording the sharpest decline despite the continuation of hot weather in the state. The California power grid operator urged the public to conserve electricity on Friday afternoon as temperatures soared into the 90s and low 100s. Loads were expected to peak on Monday at more than 48,000 MW, a high for the year.

Despite the ongoing scorching temperatures, SoCal Citygate spot gas prices tumbled $2.260 day/day to average $13.460 for gas delivery through Tuesday. Malin was down 56.0 cents to average $9.100 for the four-day period.

Huge losses extended into the Desert Southwest as well. El Paso S. Mainline/N. Baja plunged $1.810 day/day to average $13.530. Kingsgate was the biggest mover in the Rockies, with cash prices tumbling $1.045 to $1.755 amid additional constraints upstream on Westcoast Transmission.

With Friday’s pullback, a few Northeast locations slid back under $8.000, on par with producing hubs in Appalachia.

With heat continuing throughout the Southeast, prices hovered on either side of $9.000. Henry Hub fell 26.5 cents day/day to average $8.980.

Prices throughout most of Texas came off significantly more as the Labor Day weekend was expected to be more about rain and galoshes than barbecue and swimming pools. Houston Ship Channel spot gas prices tumbled 39.5 cents to $8.355, while Agua Dulce plummeted 47.0 cents to $8.300.

Meanwhile, tropical activity is picking up in the Atlantic, with the National Hurricane Center keeping an eye on a couple of disturbances.

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The first disturbance was located a few hundred miles east of the Leeward Islands and given a 70% of formation through Wednesday. Shower activity associated with another disturbance had close to zero chance of formation during that time, with unfavorable conditions in place along its track.

At this time, neither weather system poses any threat to the United States. Even still, another system, Danielle, on Friday became the first named hurricane of the Atlantic hurricane season. This served as a stark reminder that September is prime timing for storms, with Irma, Maria, Ike and Rita among the most notable in recent history.

FAQs

What is the long term outlook for natural gas prices? ›

ANZ Research forecast LNG spot price to average $40.7/MMBtu in 2022, as of 8 September. The price of the super-chilled natural gas is expected to drop to $36.3 in 2023 and to $20.5 in 2024. The World Bank in April forecast US natural gas prices could average $5.20/MMBtu in 2022, $4.80 in 2023 and $4.20 in 2024.

Why are natural gas futures falling? ›

Natural Gas Futures Prices Fall Further Amid Threats to LNG Exports, Waning Weather Demand.

Is natural gas bullish or bearish? ›

Natural gas price fluctuates within the bearish track – Analysis – 27-9-2022.

What are futures of natural gas? ›

Natural gas futures can be used for hedging or speculating and can be traded nearly 24 hours per day, 6 days per week Trading natural gas futures allows hedgers to manage risk within the highly volatile natural gas price, which is driven by weather-related demand.

What will natural gas prices be in 2023? ›

Recent Contracts
LastChg
Natural Gas Jan 2023$7.136-0.111
Natural Gas Feb 2023$6.841-0.096
Natural Gas Mar 2023$5.943-0.085
Natural Gas Apr 2023$4.840-0.047
6 more rows

Will natural gas prices go down in 2022? ›

ANZ Research forecast the LNG spot price to average $40.7/MMBtu in 2022. The price of the super-chilled natural gas is expected to drop to $36.30 in 2023 and to $20.50 in 2024.

What is the highest price natural gas has ever been? ›

Historically, Natural gas reached an all time high of 15.78 in December of 2005. Natural gas - data, forecasts, historical chart - was last updated on October of 2022.

How do you trade natural gas futures? ›

5 steps to trading natural gas
  1. Learn how CFDs work.
  2. Create an account and deposit your funds.
  3. Analyse supply and demand factors in the natural gas market.
  4. Choose the trading strategy that works best for you.
  5. Open, monitor and close your first position.

Why are natural gas prices falling? ›

11, 2022. Some states have also suspended their gas taxes, which artificially pushes prices lower. But the main reason for the fall is the decline in oil prices.

Is natural gas buy or sell? ›

A summary for Natural Gas Futures. Signals range from Strong Buy, Buy, Neutral, Sell to Strong Sell.
...
Settings.
PeriodSimpleExponential
MA56.846 Sell6.843 Sell
MA106.887 Sell6.866 Sell
MA206.891 Sell6.885 Sell
MA506.921 Sell6.906 Sell
2 more rows

Why is natural gas so high now? ›

Supply concerns

Too few pipelines are available to move the fuel due to high costs, lawsuits, and reduced investment from energy firms following the pandemic. In the U.S., natural gas inventory is typically built up over summer and fall and drawn down in winter and spring.

Why is the price of gas so high? ›

Energy prices around the world rose sharply as Covid lockdowns were lifted and economies returned to normal. Many places of work, industry and leisure were all suddenly in need of more energy at the same time, putting unprecedented pressures on suppliers.

What is the best natural gas ETF? ›

3 Best-Performing Natural Gas ETFs
  1. United States Natural Gas Fund (UNG) Information collected date: October 6, 2021. ...
  2. United States 12 Month Natural Gas Fund (UNL) Information collected date: October 6, 2021. ...
  3. iPath Series B Bloomberg Natural Gas Subindex Total Return ETN (GAZ) Information collected date: October 6, 2021.
5 May 2022

Can you invest in natural gas? ›

Those who decide to invest in natural gas have plenty of ways to gain exposure to the fuel. Exchange-traded funds (ETFs) are one possibility, as is buying a futures contract or investing in natural gas stocks on an exchange.

How much do natural gas traders make? ›

How much does a Natural GAS Trader make? As of Sep 15, 2022, the average annual pay for a Natural GAS Trader in the United States is $106,973 a year.

Will gas prices decrease in 2023? ›

Natural gas spot prices at Henry Hub will average roughly $9/MMBtu during the fourth quarter before retreating to around $6 on average in 2023 amid rising domestic production, according to the latest projections from the Energy Information Administration (EIA).

What will gas prices be in 2025? ›

Gas price prediction May 2025: Gas's price for May 2025 according to our analysis should range between $19.48 to $22.42 and the average price of GAS should be around $20.95.

Will electricity prices go down in 2023 in US? ›

U.S. energy prices are expected to remain high through 2023 as a result of economic recovery and the Russian invasion of Ukraine, according to the U.S. Energy Information Administration (EIA).

Will natural gas prices go up in the future? ›

For the NYISO Hudson Valley Zone G, EIA forecasts that for 2022 the wholesale power price will be around $83/MWh and that would be about 80% higher than the 2021 annual average with that mostly reflective of the fuel cost increase, Hodge said.

What state has the cheapest natural gas? ›

The cheapest residential natural gas rates

Utah has the cheapest natural gas rates, coming in at $9.12 per 1,000 cubic feet. That's nearly 8 percent lower than No. 2 Montana. The average rate for the month was $17.57.

Why is gas so expensive in 2022? ›

High demand for crude oil and low supply pushed gas prices upward this year. And though the Federal Reserve has raised interest rates four times so far in 2022—and is planning on more raises in the near future to nudge prices down—there are other factors at play internationally.

Who controls natural gas prices? ›

Our rates are regulated by the California Public Utilities Commission, or CPUC, based on three components: Commodity Costs – The cost of the natural gas itself. Transportation Costs – The cost of natural gas delivery. Public Purpose Surcharge – The cost to fund natural gas-related programs.

Who sets the gas price? ›

Five Fast Facts About U.S. Gasoline Prices. Petroleum prices are determined by market forces of supply and demand, not individual companies, and the price of crude oil is the primary determinant of the price we pay at the pump.

Is natural gas cheaper than oil? ›

Efficiency of the natural materials

Oil simply costs more than gas, but that doesn't help to explain why. During combustion, it has been proven that natural gas is far more efficient at providing heat energy.

How do natural gas futures contracts work? ›

Natural Gas futures are standardized, exchange-traded contracts in which the contract buyer agrees to take delivery, from the seller, a specific quantity of natural gas (eg. 10000 mmbtus) at a predetermined price on a future delivery date.

How are natural gas futures measured? ›

The value of a futures contract can be calculated by multiplying the market's current price by the contract's size. Because a futures contract's size is 10,000 million (10 billion) BTUs, you simply multiply the current price by 10,000.

What is the Henry Hub for natural gas? ›

Henry Hub is a natural gas pipeline located in Erath, Louisiana, that serves as the official delivery location for futures contracts on the New York Mercantile Exchange (NYMEX). The hub is owned by Sabine Pipe Line LLC and has access to many of the major gas markets in the United States.

Will oil prices go down in 2022? ›

According to the September STEO, the EIA sees the Brent spot price averaging $104.21 per barrel in 2022 and $96.91 per barrel in 2023. Broken down quarterly, the STEO forecasts that the commodity will average $103.89 per barrel in the third quarter of this year and $97.98 per barrel in the fourth quarter of 2022.

Is natural gas going away? ›

While there are efforts to eventually phase out the use of natural gas, most experts are of the opinion this would likely not happen until 2040, at the earliest.

What is the lot size of natural gas? ›

1250 mmbtu

What is the price of natural gas on the stock market? ›

NG=F - Natural Gas Nov 22
Last Price6.874
Day's Range6.705 - 7.044
Volume91,998
Ask6.842

How is natural gas sold on the stock market? ›

U.S. market mechanisms

The natural gas market in the United States is split between the financial (futures) market, based on the NYMEX futures contract, and the physical market, the price paid for actual deliveries of natural gas and individual delivery points around the United States.

Is natural gas cheaper than propane? ›

The U.S. average cost for propane is $2.41 per gallon. One million BTUs of natural gas is roughly 11.20 gallons of propane. Which means for the same amount of fuel, you'll pay $6.23 for natural gas and $26.99 for propane. The more efficient the fuel is, the less you'll use, which plays a role in overall cost.

Will high gas prices affect electricity prices? ›

For the wholesale electricity market, there has been a reduction in available power supplies compared to last year which, combined with higher gas prices, has led to an increase in the wholesale price of electricity.

Should I lock in natural gas rate? ›

Since the temperature is usually more moderate in late spring and early fall, fewer people rely on natural gas to heat and cool their homes during those times. Lower usage is a factor in causing market prices to drop, making the shoulder months typically the best time to lock in natural gas rates.

Will energy prices go up in October 2022? ›

What's the maximum charge for a single unit of electricity or gas from 1 October 2022? So, from 1 October 2022, if you're on a standard variable tariff paying by direct debit, the average unit price will be frozen at 34.0p/kWh for electricity and 10.3p/kWh for gas (including VAT).

Will energy prices go down in 2022? ›

Wholesale energy prices (the price that suppliers pay to buy the energy they sell to their customers) are very unlikely to go down in 2022 – in fact, they will almost definitely be going up. Russia's invasion of Ukraine is largely to blame for this.

Is electricity cheaper than gas? ›

What's cheaper, gas or electricity? Gas energy is much cheaper to run than electricity on a regular basis, but the overall costs of installation, maintenance and running expenses tend to favour electricity, with the average lifetime of products also outlasting that of gas.

What is the largest natural gas ETF? ›

The largest Natural Gas ETF is the United States Natural Gas Fund LP UNG with $487.09M in assets.

What is the best natural gas stock to buy now? ›

7 Best Natural Gas Stocks to Buy Now
LNGCheniere Energy$160.50
EQTEQT Corporation$49.79
RRCRange Resources$31.67
SWNSouthwestern Energy$7.64
ARAntero Resources$40.72
2 more rows
12 Sept 2022

How do I invest in rising gas prices? ›

One way to invest in rising crude prices is through the United States 12 Month Oil (NYSE: USL) fund. The fund is an exchange-traded security that tracks the price movements of WTI crude oil.

Which company produces the most natural gas? ›

The company is owned by the Government of Saudi Arabia and generated USD 355.9 billion — making it one of the largest natural gas producers companies in the world.
...
Top 10 Largest Natural Gas Companies in the World 2022.
Rank1
Natural Gas CompanyChina National Petroleum Corporation
Revenue (USD billions)392.9
HeadquartersBeijing, China
9 more columns
13 Jul 2020

Who are the top natural gas producers in US? ›

Resources
CompanyProduction State(s)
Pioneer NaturalTX
QEP ResourcesLA, ND, TX, UT
OccidentalNM, TX
SM Energy CompanyTX
35 more rows

Is Tellurian a good investment? ›

Is Tellurian Stock a good buy in 2022, according to Wall Street analysts? The consensus among 5 Wall Street analysts covering (NASDAQ: TELL) stock is to Buy TELL stock.

Can you hold futures overnight? ›

To hold a Futures or Options on Futures position overnight in any Futures contract, clients must have available, at the close of the day's session, the overnight margin requirement according to TD Ameritrade Futures & Forex's requirements for the particular contract.

What is the salary of a trader? ›

What is the salary of a Trader in India? Average salary for a Trader in India is 3.5 Lakhs per year (₹29.2k per month). Salary estimates are based on 207 salaries received from various Traders across industries.

How do I train for trading? ›

  1. Conduct a Self-Assessment. ...
  2. Arrange Sufficient Capital. ...
  3. Understand the Markets. ...
  4. Understand Securities. ...
  5. Set up a Trading Strategy. ...
  6. Integrate Strategy and Plan. ...
  7. Practice Money Management. ...
  8. Research Brokerage Charges.

What will the price of gas be in 2025? ›

Gas price prediction May 2025: Gas's price for May 2025 according to our analysis should range between $19.48 to $22.42 and the average price of GAS should be around $20.95.

Should I lock in natural gas rate? ›

Since the temperature is usually more moderate in late spring and early fall, fewer people rely on natural gas to heat and cool their homes during those times. Lower usage is a factor in causing market prices to drop, making the shoulder months typically the best time to lock in natural gas rates.

Will energy prices go down in 2022? ›

Wholesale energy prices (the price that suppliers pay to buy the energy they sell to their customers) are very unlikely to go down in 2022 – in fact, they will almost definitely be going up. Russia's invasion of Ukraine is largely to blame for this.

How much will a gallon of gas cost in 2050? ›

Specifically, prices would go up $0.13 in 2015, $0.25 in 2030, and $0.69 in 2050, according to the June 23 report.

How much will gas be in 2027? ›

Read the Detailed Gas Price Prediction Here

Gas price prediction January 2027: Gas's price for January 2027 according to our analysis should range between $31.42 to $36.15 and the average price of GAS should be around $33.79.

How much will gas be in 2026? ›

Gas price prediction April 2026: Gas's price for April 2026 according to our analysis should range between $25.44 to $29.27 and the average price of GAS should be around $27.36.

What will a gallon of gas cost in 2030? ›

Gas price prediction May 2030: Gas's price for May 2030 according to our analysis should range between $84.17 to $96.84 and the average price of GAS should be around $90.51.

What states produce most of our natural gas? ›

Texas is the leading U.S. state in natural gas energy production. In 2021, the oil and gas rich state generated nearly 235 terawatt hours of electricity from gas turbines. Florida followed, with 180 terawatt hours of natural gas energy produced. Texas is also the U.S. state that consumes the most natural gas energy.

Why are we paying so much for gas? ›

High demand for crude oil and low supply pushed gas prices upward this year.

Will natural gas prices continue to rise? ›

We expect the Henry Hub price to average about $9/MMBtu in 4Q22 and then fall to an average of about $6/MMBtu in 2023 as U.S. natural gas production rises.

Should I fix my energy prices until 2023? ›

You should only fix your energy prices until 2023 if you can source a cheaper fixed tariff than that of the October 2022 price cap increase. The market is incredibly tough at the moment, so finding a cheaper tariff may not be possible.

Will energy prices go up in October 2022? ›

What's the maximum charge for a single unit of electricity or gas from 1 October 2022? So, from 1 October 2022, if you're on a standard variable tariff paying by direct debit, the average unit price will be frozen at 34.0p/kWh for electricity and 10.3p/kWh for gas (including VAT).

Is it cheaper to use gas or electricity 2022? ›

Gas heat is cheaper than electric (4.65p/kWh vs 16p/kWh respectively), however, there are other costs to consider in addition to the basic unit cost of the fuel. The cost of installation and the maintenance costs vary greatly between the two.

What was the highest gas price ever? ›

Prior to 2022, the highest ever average recorded by AAA was $4.114 per gallon in July 2008. Average U.S. gas prices soared to a record high of $4.33 in March shortly after Russia invaded Ukraine, which caused crude oil prices to surge and threatened global supply.

What does the future of gas prices look like? ›

The bank now expects US gas prices to reach an average of $4.35 a gallon by the fourth quarter of 2022, a roughly 7% rise from current levels. Prices will then pick up to an average of $4.40 for the whole of 2023, peaking at around $4.53 a gallon in the second quarter of next year, its analysts forecast.

What will the price of gas be in 2024? ›

Gas price prediction January 2024: Gas's price for January 2024 according to our analysis should range between $13.06 to $15.02 and the average price of GAS should be around $14.04.

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