NYMEX NatGas Price Jumps Another 27.3 Cents to $4.28/MMBtu
Yesterday, MDN noted the NYMEX “front month” futures price of natural gas had jumped 28.2 cents to close just above $4/MMBtu (see Wx Drives March NYMEX Price to Close at $4/MMBtu, Spot Price Higher). The price did it again. Yesterday, the NYMEX price for March delivery closed +6.8% to $4.280/MMBtu, a new 52-week high and the highest settlement value for the front-month contract since December 30, 2022. U.S. natural gas has surged 40% this month alone and 18% year-to-date. Read More “NYMEX NatGas Price Jumps Another 27.3 Cents to $4.28/MMBtu”
Hold on, everyone. The NYMEX natural gas price roller coaster is climbing up the next hill, and there is no telling how high it will go—or how quickly it will go down again. Yesterday, the NYMEX “front month” (March contract) for natural gas futures based on the price at the Henry Hub soared 28.2 cents to close at $4.0070 (call it $4.01). It was the sixth day in a row that the price has gone higher. The current cold snap (weather) in the central and eastern sections of the country is credited with the rise in the price. NGI reports its nationwide average for the spot price of natgas soared $1.010 to $6.880, its highest level since Winter Storm Enzo in mid-January. 
Baby, it’s cold outside! And it’s getting colder beginning this weekend and moving into next week. The cold weather, combined with less natural gas in storage (less than the average), has increased the NYMEX “front month” futures contract for natural gas. Yesterday, the NYMEX price closed at $4.2580 per million British thermal units (MMBtu), the highest close since Dec. 30, 2022. Temps across the eastern half of the country (especially in the northeast) are set to hit lows not seen in years beginning next week. We think prices for NYMEX and many spot prices at trading hubs will spike higher. 
At its core, the theory of man-made global warming (renamed to “climate change”) is easy to understand. The theory says when we burn fossil fuels (or wood, or garbage, or any carbon-based source), carbon dioxide is released and floats up into the atmosphere. If there’s too much CO2 floating up there, it creates a canopy trapping the heat that rises from the earth, warming the entire planet. If it’s true that more CO2 creates a canopy, the question becomes, how much is too much CO2? Strong arguments are made that a slightly warmer planet benefits all life and is not necessarily a bad thing. However, a veteran energy analyst, in responding to the memes that natural gas should be phased out due to fear of global warming, offers a blunt assessment: CO2 is not the key factor that controls the temperatures we experience on the surface of our planet. The key factor is wind. 
AccuWeather meteorologists who specialize in predicting the weather for the natural gas industry issued a statement to Rigzone saying several Arctic blasts will send waves of bitterly cold air across much of the eastern United States starting last weekend. The meteorologists said the “deep freeze could impact natural gas production and operations in the Northeast.” They specifically mentioned the Marcellus Shale by name, stating new shale drilling and flows from wells to pipelines “could be impacted by bitterly cold air.”
According to a Reuters analyst, natural gas prices in Asia, Europe, and North America have climbed by 30% to 50% in 2024 and are likely to keep rising over the coming months in early 2025 as forecasts for cold weather trigger higher heating demand in key consumer hubs. Although Europe entered the winter with “full” gas stocks, Europe and Asia are already looking to restock by buying more natgas (LNG), spurring demand for LNG. That should ensure gas traders will remain bullish (pushing prices higher) until the upcoming winter is over. Gas prices “may have little scope to retreat until well into 2025.” We like the sound of that! 
The analysts at the federal U.S. Energy Information Administration (EIA) are cautioning (we’d call it warning) that the global natural gas market may experience a tighter supply-demand balance this winter than in the prior two winters. Why? Several reasons, chief among is the coming colder winter. El Niño changes to La Niña this season. La Niña generally brings colder, drier weather to the Northern Hemisphere. But weather isn’t the only factor for EIA. So, too, is the lack of growth this winter in new LNG exports from the U.S. 
Dr. Judith Curry is an American climatologist and the former chair of the School of Earth and Atmospheric Sciences at the Georgia Institute of Technology. Her research interests include hurricanes, remote sensing, atmospheric modeling, polar climates, air-sea interactions, climate models, and the use of unmanned aerial vehicles for atmospheric research. She was a member of the National Research Council’s Climate Research Committee, published over a hundred scientific papers, and co-edited several major works. She’s worked with NOAA and NASA. She has more awards than you can count. Yet because she dares to openly ask questions and point out political bias in the global warming community, she has been ostracized. She is one of the smartest people alive regarding climate change. 
We began our headline with the word “Surprise!” because, well, nobody is surprised that Freeport LNG is, once again, down. That has been the theme since it began to operate. We’ve tracked the up down up down up down situation at Freeport LNG since it came online in 2019. Freeport was mostly offline this year following an episode of cold temps in January (see 
Last Friday, Morningstar DBRS published a commentary titled, “Record-High Temperatures Boost Power Demand but Ample Gas Inventories Prevent a Bigger Jump in Prices” (full copy below). Since early March, U.S. and European natural gas prices have climbed steadily in the anticipation — and eventual onset — of much warmer than normal early summer temperatures even as producers curbed supply to contend with the glut built up during the past mild winter. Although U.S. and European gas storage inventories have been drawn down from early 2024, they remain high for this time of year. Large inventories are preventing prices from moving higher, says Morningstar analysts. It’s classic economics — more supply with the same demand equals lower prices.
U.S. natural gas and power prices hit multi-year highs in mid-January with the prospect of frigid temps and snow storms in various portions of the country (see 
U.S. natural gas and power prices hit multi-year highs on Friday with the prospect of frigid temps and snow storms in various portions of the country. The extreme cold was expected to bring record gas demand and cut supplies by freezing wells. The spot price of natural gas at various trading hubs from the West Coast to Middle America to the East Coast all jumped. Of particular interest for us, spot gas prices at the Eastern Gas South hub, widely considered the “benchmark” for the Marcellus/Utica, jumped from $2.45 per million British thermal units (MMBtu) on Thursday to $10.40 on Friday — the highest price at that hub since July 2008.
The commodity price for natural gas, as expressed by the NYMEX Henry Hub futures contract (for January), fell 10.5% in early trading yesterday before finally closing at $2.43/MMBtu, down 15 cents (6.17%) from the previous day. Why the big drop when prices are already low? Lack of demand due to warm weather. In fact, according to the National Weather Service, the entire continental United States will be warmer than average for the period of Dec. 19-25. Plump storage numbers, coupled with the weather, had natgas traders heading for the exits.
According to analysts writing for S&P Global Commodity Insights, the long-range forecast from the U.S. National Weather Service calls for milder temperatures in the U.S. Mid-Atlantic region this winter. Warm temps equal less natural gas usage. Williams’ Transco Regional Energy Access Expansion (REAE) project will partially come online in October, flowing an initial 450 MMcf/d (out of 829 MMcf/d) of Marcellus gas to PA, NJ, and Maryland. More supply with less demand is a classic economic prescription for lower prices in New York, New Jersey, and the Mid-Atlantic region. So says the S&P analysts.
Less than a year ago, the Northeast experienced a major winter storm at Christmastime (Winter Storm Elliott). Do you remember it? On Dec. 23, temps in places like the Lehigh Valley of Pennsylvania hit 60 degrees! Within 12 hours, the bottom dropped out, with temps plunging into the single digits—a more than 50-degree change. Dec. 24’s high temp in the Lehigh Valley (Allentown) was 13 degrees. The massive temperature change caused problems with power generation by natural gas plants, some of which went offline due to freeze-ups in the pipelines that feed them. The Federal Energy Regulatory Commission (FERC) and North American Electric Reliability Corporation (NERC) issued a final report yesterday on Winter Storm Elliott, complete with recommendations for sweeping new regulations to prevent future blackouts from storms like Elliott.