Losses were most pronounced on the East and West coasts, with prices tumbling 50.0 cents or more at several locations. Spot gas prices extended their losing streak another day as widespread highs of 60s to 80s did little to drum up demand. “Looking ahead to next year, the outlook for pricing still remains at the whims of this winter’s weather, in our view, which could drive significant 1Q2022 upside and materially reprice the curve.” More Losses For Cash “For the U.S., we continue to forecast dry gas supply rising towards 94 Bcf/d in December,” the TPH team said. The increase in imports has occurred even as Western Canadian receipts have retreated from recent highs of 12.75 Bcf/d toward 12 Bcf/d over the weekend. On the supply front, TPH said that aside from the fluctuations in production, Canadian net imports have trended higher, toward 5.8 Bcf/d in recent days. This is particularly notable since weather has been mostly mild across the country over the past month. Residential/commercial demand has tracked modestly ahead of the five-year average week-to-date at roughly 15.8 Bcf/d, versus the five-year average of 15 Bcf/d, according to TPH. The gas share of thermal generation remains “sound” at 64% as of Monday versus a September average of 61%, the analysts said. The sector kicked off the week at around 27 Bcf/d, the lowest this shoulder season, but the figure is in line with the five-year average of around 27 Bcf/d despite robust pricing. TPG analysts noted that power generation demand in the Lower 48 has trended lower this week, but a closer look at the data revealed continued support for prices. With varied early-November forecasts, the market appears to be repricing the risk premium for winter in North America - even as Europe awaits higher Russian supplies as heating demand picks up.
said beyond the continued warm forecasts, it has seen limited fundamental catalysts for the recent sell-off. With the production drop likely temporary, the analyst team at Tudor, Pickering, Holt & Co. Line 2000 on the EPNG system also remains out of service following an explosion this summer. There also is work underway at the Eunice compressor station that is limiting flows at the ITEXNEUN receipt. Meanwhile, Permian New Mexico output is down around 275 MMcf/d because of EPNG’s Line 1300 event. NGPL began maintenance on Segment 25, with firm transportation restrictions possibly impacting flows upstream, Wood Mackenzie said. Whistler Pipeline flows are down around 265 MMcf/d at roughly 300 MMcf/d, compared to about 565 MMcf/d for Monday’s gas day, according to Wood Mackenzie.Įast Texas output was down about 300 MMcf/d along Natural Gas Pipeline Co. In both sets of data, Texas and the New Mexico portion of the Permian Basin posted notable declines, with maintenance events contributing to some of the reductions.įor example, El Paso Natural Gas Pipeline (EPNG) began maintenance on Line 1300, restricting westbound flows.
Wood Mackenzie also estimated production lower day/day, but it put the official tally at around 91.4 Bcf. Bloomberg data showed output tumbling more than 2 Bcf/d day/day to slightly below 90 Bcf. “Should the bulls engineer a reversal from either one of these levels, we will have to promptly assess the potential for a recovery,” analyst Brian Larose said.īulls got some ammunition in the latest production figures. The firm noted that $4.876 is the 50-day moving average from there, $4.666 is another important level to be watched. In examining the technical factors at play, ICAP Technical Analysis zeroed in on two price levels. That’s where the prompt month found support, eventually clawing its way back above $5.000. The November contract opened the session slightly below Monday’s close at $4.985 and went on to fall to an intraday low of $4.825. fell another 29.5 cents to $4.660.Īfter shedding roughly 70 cents in the prior two sessions, and with weather models continuing to show a mild near-term outlook, futures were poised for a third straight drop early Tuesday.
Spot gas prices, however, remained firmly in the red amid a near-perfect temperature backdrop that is expected to last into November.
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