Natural Gas Is Surging Again

Natural gas is surging again as winter storms seek to disrupt the Thanksgiving travel holiday, Phil Flynn, a Senior Market Analyst at the PRICE Futures Group, told Rigzone.

“On top of that, cold weather in Europe is keeping prices elevated around the globe,” Flynn added, warning that “the perception of a natural gas glut could be challenged if we have a long, cold winter”.

“Some forecasters are now flipping to a very cold December and if that’s the case, it may be a whole new ball game for the natural gas market,” Flynn said.

Art Hogan, Chief Market Strategist at B. Riley Wealth, told Rigzone that natural gas prices remain well bid, “as we continue to see more seasonally appropriate colder weather in most of the U.S., combined with the technical break out above $3.10”.

“The next technical resistance lever sits at $3.40. A break above that could see prices run up to $3.50,” Hogan said.

“It looks like winter weather has arrived, after a warmer than usual autumn season, and with that, buyers of Nat Gas futures,” he added.

Frederick J. Lawrence, the ex-Independent Petroleum Association of America (IPAA) Chief Economist, told Rigzone that natural gas prices “continue to rally due to the onset of colder weather and increased heating demand across the United States”.

“Colder trends are forecast for the next 8-15 days, particularly in the Midwest and eastern parts of the country. Winter storms in the northeast and colder weather in early December have strengthened the December contract as it nears expiry on Tuesday,” he added.

“The combination of colder weather and strong LNG shipments will continue to support the natural gas price trend into 2025,” Lawrence went on to state.

In its latest weekly natural gas storage report, which was released on November 21 and included data for the week ending November 15, the U.S. Energy Information Administration (EIA) revealed that “working gas in storage was 3,969 billion cubic feet as of Friday, November 15, 2024, according to EIA estimates”.

“This represents a net decrease of three billion cubic feet from the previous week. Stocks were 141 billion cubic feet higher than last year at this time and 239 billion cubic feet above the five-year average of 3,730 billion cubic feet,” it added.

“At 3,969 billion cubic feet, total working gas is above the five-year historical range,” it continued.

In a statement posted on its X page today, the National Oceanic and Atmospheric Administration’s (NOAA) National Weather Service (NWS) warned that “heavy snow is expected early this week across the higher terrain of the western U.S. and the UP of Michigan”.

In a separate statement posted on its X page late yesterday, the NWS said “heavy snow over parts of the Sierra Nevada Mountains and Upper Great Lakes will cause slick roads tonight into Monday morning”.

In a statement posted on its X page on November 21, the NWS warned that “after Thanksgiving, a large portion of the U.S. will likely see below normal temperatures into early December”.

On November 20, Ole R. Hvalbye, a Commodities Analyst at Skandinaviska Enskilda Banken AB (SEB), told Rigzone that natural gas prices at Henry Hub had “surged to their highest levels since June, driven by forecasts of colder than normal temperatures in the coming weeks and supported by strong LNG export flows”.

In a statement posted on its website on November 19, GasBuddy highlighted that its annual Thanksgiving Travel Survey “reveal[ed]… that 72 percent of Americans plan to take a road trip over the holiday”.

“This is a 75 percent increase from the 41 percent that planned to take a trip by car in 2023, amidst gasoline prices that have fallen to multi-year lows, including 29 states where average prices are currently below $3 per gallon,” the statement added.

To contact the author, email andreas.exarheas@rigzone.com