Natural Gas Market Report
Each month, Gas South puts together a natural gas market report to help simplify the updates you need to know about what's happening in the natural gas industry for your business. These updates include NYMEX settlement prices, storage information and more.
With summer winding down, attention is shifting to the heating season ahead. Although market fundamentals remain largely the same, activity in Europe, trends in basis pricing and of course, winter weather, could all have an impact on market prices.
The marketplace remains bullish, with consistent dramatic price swings expected as we look forward to the heating season. What’s more unusual though, is the surge in the Southeast’s locational basis, which are trading at levels unseen in years or never before.
June saw multiple single-day price swings over $1.20, but by the end of the month, contracts fell more than 40%.
Wide fluctuations on the NYMEX continued in June, with over a dollar difference in the highs and lows of daily trade. Although the U.S. has made commitments to help bridge the LNG supply gap, send-out capacity is already at 90%, and a major terminal outage means 2 Bcf/d are offline for several months.
Market volatility continues, as May’s settlement represented more than a 35% increase over April’s expiration, and price conditions are the highest seen since September 2008.
The ongoing conflict in Ukraine continues to upend the natural gas market. Volatility remains high, but the U.S. has been shielded from global prices as it has more than enough supply to meet domestic demands.
Natural gas contracts for March expired at $4.568/Dth. With an outpouring of new developments, from global conflict to regulatory setbacks, time will tell how the fundamentals will be impacted in the near future.
Not since February 2003 has the NYMEX contract had such a delta between the high and low traded price on the day. The wild movement is attributed to a technical short squeeze, lingering cold temperatures at home and mounting geopolitical pressures abroad.
As we embark upon a new year and the winter demand season unfolds, milder temperatures indicate a more balanced outlook on the natural gas market.
December's trading pattern mirrors prior months, with a run-up at the height of the settlement trading activity and a collapse in sessions immediately after. Although the fundamentals have turned bearish, the market is still volatile, and the entirety of winter remains.
Prices were seasawing to extremes throughout October, and it's likely we’ll see the current market volatility continue. Some factors point to positive outcomes, while others won’t improve enough to make an impact.
NYMEX prices are at their highest levels since early 2014. As we move through October, the steady upward march in NYMEX natural gas prices is forecast to last throughout the heating season.