Gas-directed drilling bumped up during the past several weeks with price increases of $3 per MMBtu and more. But now in late October, natural gas pricing at Henry Hub is below $3 again, and the market will look for reasons to sustain the earlier momentum. Storage inventories are strong, so the one ingredient missing to frame the coming winter is heating degree days.
Will the winter for the majority of the country mean fewer (warmer than normal) or more than average heating degree days (colder than normal)? If it is cold, will it be sustained over large regions or hit and miss? Local natural gas utilities always plan for the possibility of reaching a peak design day and thus serving firm customers and others without interruption. Now Mother Nature will determine the targets to be managed with all of the resources currently in place to assure reliable, affordable service.
Visit this link to download the full Natural Gas Market Indicators report. Topics covered in this week’s report include: Reported Prices, Weather, Working Gas in Underground Storage, Natural Gas Production, Shale Gas, Rig Counts, Pipeline Imports and Exports, and LNG Markets.