NG Week Ahead: Storage Surprise Meets a Polar Vortex Wildcard
Natural gas fell 5% last week as a bigger-than-expected storage build and El Niño warmth hit December; this week hinges on the EIA report and early cold risk.
By NatGas Central
House view
Changed from the 25 Oct postWeekly posts use five words: and Cautious lean lower, Balanced is neutral, and Constructive lean higher. The daily report’s calls use Bullish / Bearish / Neutral, and its colours use supportive and pressuring for the same direction.Weekly posts use five words: and Cautious lean lower, Balanced is neutral, and Constructive lean higher. The daily report’s calls use Bullish / Bearish / Neutral.
Last Week in Natural Gas
Natural gas spent the last week of October paying for a warm start to the heating season. December futures () settled Friday at $2.898, down 5.0% from $3.050 a week earlier, and the damage was back-loaded. Monday and Tuesday shaved small losses, and Wednesday’s 0.9% bounce came as the November contract rolled off the board on October 28. Thursday broke the tape: the EIA release for the week ending October 23 printed a +80 Bcf injection against a 75 Bcf consensus, snapping a 10-week run of below-average builds, and December fell 2.6% on the day, the week’s largest move, before giving up another 1.8% Friday. Total working gas climbed to 3,724 Bcf, 38 Bcf (1%) above the five-year average and 147 Bcf (3.8%) below year-ago levels, with South Central doing the heavy lifting at +43 Bcf. Mild forecasts for the East through early November pulled cash prices lower across the map on the same day. Behind it all sits : the July-September printed +2.16, and the event is still strengthening toward a winter peak that favors a mild northern heating belt.
The Week Ahead
The week turns on two questions: does the warmth break, and does the surplus keep widening. Thursday’s November 5 EIA release covers the week ending October 30, another mild stretch across the eastern consuming regions, so the market is braced for a build that again runs heavy for the calendar; no published consensus had firmed up by the weekend. A print at or above expectations extends the cushion and keeps December on the defensive. The upside catalyst sits in the stratosphere. Models flag an early-November disruption and a colder seasonal trend for the southern and eastern US, and any shift in the 11-15 day maps toward mid-November cold hits a that has already priced out early heating demand. LNG is the floor: Gulf Coast terminals run close to nameplate with European and Asian benchmarks far above , so export pull cannot fall much, but it cannot rise much either until Golden Pass and Corpus Christi Stage 3 add trains. The curve tells the story. January holds a steep premium over December, paying for cold that spot has not yet seen. The EIA Short-Term Energy Outlook follows on November 10.
In Plain English
U.S. natural gas prices slid about 5% last week as an unusually warm end to October left homes and businesses needing less heat, and more gas than expected went into storage. The country enters winter with comfortable supplies, slightly above what’s normal for this time of year, though below last year’s level. A strong El Niño, a warming of Pacific waters that tends to bring milder winters to the northern U.S., is still building, which could keep heating demand and bills in check. The wild card is an early-winter cold snap. Meanwhile, heavy overseas demand for American gas keeps a floor under prices and points to firmer prices next year.
How this is written
Written each Sunday from the week’s seven daily outlooks and the week’s public market news, under the rules on our Method page. Questions: info@natgascentral.com
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