Natural Gas Futures Market News and Commentary
Nov Nymex natural gas (NGX19) on Wednesday closed down -0.36 (-1.54%). Nov nat-gas prices erased an early rally Wednesday as they retreated from a 1-1/2 week high and closed lower after an updated weather forecast from the Global Forecast System turned temperatures warmer in the central U.S. during Oct 26-30. Nat-gas prices had earlier moved higher in the past several days and posted a 1-1/2 week high early Wednesday on forecasts for widespread cold weather across the central U.S., which would boost nat-gas demand for heat. The Commodity Weather Group on Wednesday projected colder-than-normal temperatures for the U.S. Midwest during Oct 26-30. Maxar on Tuesday said it expects below-normal temperatures across most of the eastern two-thirds of the U.S. during Oct 25-29. Money managers have record high net short positions for this time of year in seven gas contracts in data going back to 2014, which provides some fuel for a potential short-covering rally. High U.S. nat-gas production continues to be a bearish factor with lower-48 nat-gas production Wednesday up +8.1% y/y at 93.101 bcf/d. Strong U.S. nat-gas output has caused U.S. nat-gas inventories to rise sharply in recent months to the current level of +14.5% y/y from -22.3% y/y in March. Another negative for nat-gas prices is the consensus for this Thursday's weekly EIA nat-gas inventories to climb by 108 bcf, well above the 5-year average for this time of year of 81 bcf. Last Thursday's +98 bcf increase in nat-gas supplies pushed nat-gas inventories up to a 1-3/4 year high of 3,415 bcf the week of Oct 4. Inventories are up +15.5% y/y but are still -0.3% below the 5-year average.