NYMEX Nov Natural Gas Futures Rise to $3.268 MMBtu on Weather-Related Issues
'Natural gas prices are getting a bounce because of the weather,' said Phil Flynn, senior market analyst at Price Futures Group.
The National Weather Service calls for a likelihood of below-average temperatures to continue across much of the Midwest, Northeast, Southwest and Texas, while above-normal temperatures are in the forecast for the rest of the country, over the next six to 10 days.
These extreme weather conditions during the shoulder season are providing support for prices, Flynn said.
The offsetting weather patterns have resulted in cooling demand to extend deep into the shoulder season along with a rise in heating demand.
Residential and commercial demand saw steady gains over the past seven days and is estimated to stand at 23.7 Bcf Wednesday, according to data from S&P Global Platts Analytics. Over the next seven days, heating demand is set to average 24 Bcf/d, up from 16.9 Bcf/d seen last year for the same time period.
The lingering cooling demand and strengthening heating demand is likely to cut into injections, dampening the market's expectation of a reduced storage deficit during the fall injection season, despite elevated production levels.
'As we get closer to winter, the market is getting more and more nervous about [the storage deficit],' Flynn said.
A consensus of analysts surveyed by S&P Global Platts expects an 83-Bcf injection for the week that ended October 12, down 7 Bcf from the strong build of 90 Bcf announced last week by the US Energy Information Administration, but largely in line with the five-year build of 79 Bcf for the same time.
Veda Chowdhury, veda.chowdhury@spglobal.com
Edited by Jennifer Pedrick, jennifer.pedrick@spglobal.com
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