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November 7 Natural Gas Update
Natural gas prices are lower this morning. It seems that for the moment the December wholesale natural gas exchange contract is having a hard time going lower in this price area. The sellers believe that it's gone far enough and given the uncertainty of the colder than normal weather that is projected for the January 2010 through March 2010 timeframe, the risk in their minds is probably too high thinking much lower prices are in store. The December wholesale market opened the day yesterday at $4.71 and sat there until the storage change number came out at 10:30 eastern time. The change was an injection of 29 Bcf which brought us to another new record of 3,788 Bcf. Given that the estimates were between 30 Bcf and 34 Bcf, it seemed initially that the market viewed the storage change figure as positive so the market ran up just over $4.88 before coming back off and settling just 6 cents higher on the day at $4.782.
It seems that folks in the natural gas community are looking at Hurricane Ida which is beating up Nicaragua this morning and heading north into the Gulf. Normally at this time of year, colder air coming off the shore would easily shear this storm right in two, but the entire Gulf region has above normal to much above normal temperatures predicted for the next 5 days so this storm could remain an unexpected threat over the next several days.
On the temperature front, warmer weather is continuing to be forecasted in the Midwest and Northeast in the 6-10 and 8-14 day forecasts while the Southeast is forecasted to be below normal in the latter day forecast. These warmer temperatures continue to put downward pressure on the natural gas market this morning.