Prices Hold Near New Lows

In the wake of Tuesday’s impressive collapse, natural gas prices are having a relatively quiet morning (Wednesday) as they rebound a couple of cents off newly registered lows.

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The January 2021 contract is trading ~0.8% higher this morning at $2.425/MMBtu, nearly in line with its previous all-time low from last March.

However, without signs of a stronger bounce back in sight, the front month may be vulnerable to further selling in the coming days.

Weather forecasts held steady today and suggest that a bearish, warmer than normal pattern is set to take over once again in coming weeks.

Along with this change, expectations for demand and storage withdrawals have retreated significantly in the first half of December.

Nonetheless, if there is one bright spot for the bulls, it is continual outperformance of US LNG exports. Commissioning flows to Train 3 at Corpus Christi LNG have lifted overall feedgas flows to a seven-day average above 11 Bcf/d this week, a new record that is about 3 Bcf/d higher than last year at this time (see chart).

Source: Gelber & Associates

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